Fried chicken continues to reign supreme as the main food delivery item in South Korea and many newer outlets are being launched, but more of them are closing each year, data by KB Financial Group showed Monday.
KB Research under KB Financial Group released a detailed analysis of the fried chicken business, indicating that in the past four years, despite the rise in chicken consumption the business is becoming oversaturated.
Compared to 2013 when the average per capita consumption of fried chicken in a year was 11.5 kilograms, in 2018 the number rose to 14.1 kg and is expected to reach 16.4 kg by 2028.
Corresponding to the demand, people jumping into the fried chicken businesses has also increased.
In 2018, of the 116,000 food delivery franchises located across the nation, some 25,000 were fried chicken outlets, taking up 21.1 percent of the whole. BBQ Chicken has the most stores -- 1,659 nationwide.
However, since 2014 when the number of fried chicken businesses reached a peak with some 9,700 stores it is dwindling. In 2018, around 8,400 stores were shut down surpassing the 6,200 new stores.
Currently, including independent chicken stores, there are some 409 different brands and roughly 87,000 fried chicken stores nationwide.
The report indicated that people enter the business because of the lack of entry barriers as well as the need for less store size and startup costs compared to other Korean food outlets, cafes or pubs.
While the total sales of fried chicken across the nation are increasing, an oversaturated market and the increase in operating costs is making the business less profitable.
The report also cautioned that the competitiveness is likely to continue, and efforts to differentiate the menu, service or price will be important.
By Cho Hyee-su (firstname.lastname@example.org