Annual Sales Quadruple... Kim Dongseon's 'Five Guys' Expands Its Size

Last Year's Sales Reached 46.5 Billion KRW... Turned to Profit
Three New Stores Opened in One Year
Achieved a Duopoly in the Premium Burger Market
Secured Rights for Japan... Plans for Domestic and Overseas Expansion
Department Store Struggles, Hanwha Galleria's Operating Profit Down 68%

Dongseon Kim, Vice President and Head of Future Vision at Hanwha Galleria and Hanwha Hotels & Resorts, has led the U.S. premium burger brand Five Guys to increase its annual sales more than fourfold, strengthening its position in the domestic market. Since its launch in Korea in 2023, the brand has expanded the number of stores and recorded rising sales at key locations, resulting in business growth. This achievement also earned Five Guys a license to enter the Japanese market, establishing a foothold for overseas expansion.

However, despite the strong performance in the hamburger business, Hanwha Galleria’s core department store segment has faltered due to high exchange rates and a sluggish domestic economy, significantly impacting overall profitability.

Kim Dong-seon, Executive Vice President of Future Vision at Hanwha Galleria and Hanwha Hotels & Resorts (fourth from the left), and other key stakeholders are taking a commemorative photo at the 1st anniversary event of Five Guys' domestic launch. Photo by FG Korea

According to industry sources on the 4th, FG Korea, a subsidiary of Hanwha Galleria and the operator of Five Guys in Korea, posted sales of 46.51 billion KRW last year, a 365.6% increase from 9.99 billion KRW the previous year. Operating profit for the same period was 3.37 billion KRW, turning positive from an operating loss of 1.33 billion KRW the year before. A Hanwha Galleria official explained, "The number of stores increased from two in 2023 to five last year, expanding sales volume," adding, "Profitability improved as customer traffic was steadily maintained in high foot-traffic commercial areas."

As Five Guys recorded rapid growth, Hanwha Galleria’s food and beverage division, which sells hamburgers, wine, coffee, and more, also saw sales soar to 64 billion KRW last year, more than six times the 10.4 billion KRW recorded the previous year. However, Hanwha Galleria’s 2023 sales figures exclude two months due to the spin-off and re-listing of Hanwha Solutions from March to December of that year. Considering this, annual sales are estimated to have increased about fivefold.

Five Guys opened its first store on Gangnam-daero, Seoul, in June 2023, followed by a second store in The Hyundai Seoul in Yeongdeungpo-gu, Seoul, in October of the same year. Last year, additional stores were opened in key shopping districts such as Shinsegae Department Store Gangnam, Seoul Station, and Hyundai Department Store Pangyo, continuing the trend of high demand. Considering the number of stores and their operating periods, monthly sales per store are estimated to be around 1 billion KRW. Stores 1 through 4 ranked among the top 10 in sales worldwide out of approximately 1,900 Five Guys locations.

This is a remarkable achievement given the difficulties overseas handmade burger brands face in quickly establishing themselves in the Korean market. 'Super Duper,' one of the top three burger brands in the U.S., ceased operations in Korea at the end of February due to profitability issues. The market is now reshaping into a duopoly between Shake Shack, operated by SPC Group, and Five Guys. According to a business report released by Big Bite Company, which operates Shake Shack Korea, as of December 2023, the 26 Shake Shack stores generated monthly sales of 8.95 billion KRW. When converted to monthly sales per store, this is about 400 million KRW, which Five Guys surpasses.

Five Guys aims to expand its domestic store count to 15 by 2028 and is actively pursuing new openings. On the 14th of last month, Galleria Gwanggyo, the sixth store, opened featuring the world’s first aquarium installation among Five Guys locations. This month, the seventh store is scheduled to open in Apgujeong Rodeo, Gangnam-gu, Seoul. In July last year, Five Guys secured the rights from its global headquarters to launch stores in the Japanese market, gaining a leading opportunity for overseas expansion. Following the establishment of FG Korea’s Japanese subsidiary in February, the company plans to open more than 20 stores in major Japanese regions, including Tokyo, over the next seven years. According to industry sources, the Japanese hamburger market is about 2.5 times larger than Korea’s and has recorded an average annual growth rate of 6.5% since 2015.

An FG Korea official stated, "The brand is highly favored, with Japanese tourists visiting Korea and nearby countries to try Five Guys," adding, "With proven taste and quality combined with differentiated operational strategies, we expect a strong chance of success in Japan as well."

While the food business that Vice President Kim is focusing on continues to grow, Hanwha Galleria’s core department store business still records sluggish performance. Department store sales increased 12.6% from 458.4 billion KRW in 2023 to 516 billion KRW last year, but considering the exclusion of pre-spin-off sales, a decline is likely. Notably, Hanwha Galleria’s operating profit fell sharply by 68%, from 9.8 billion KRW to 3.2 billion KRW during this period.