Lotte GRS, once overshadowed by doubts over taste and image, to breach 1 trillion won sales mark again after 7 years
Burger chain Lotteria, under Lotte Group’s food franchise arm Lotte GRS, is making a bold comeback, burning away its stale reputation with a flavorful rebranding.
Industry insiders predict that Lotte GRS will break through the 1 trillion won ($694 million) sales barrier for the first time after a seven-year stagnation. Lotteria is leading the charge, contributing over 70 percent of the company's total revenue.
This sales milestone would place the burger chain back on the 1 trillion won track, a streak it maintained from 2013 to 2017.
The food group has come a long way, having faced major challenges starting in 2018. Its sales declined from over 1 trillion won in 2017 to 830.9 billion won in 2018, further plummeting to 675.7 billion won in 2021 during the pandemic.
The company returned to profitability in 2022, achieving operating profits of 1.7 billion won on revenues of 781.5 billion won. By the third quarter of last year, Lotte GRS reported a 7 percent on-year revenue increase to 744 billion won, with operating profits soaring 109.3 percent to 36 billion won.
Lotteria's turnaround after years of struggles highlights its resilience amid fierce competition from McDonald's, Burger King and local rival Mom's Touch. In 2023, McDonald's posted the highest annual sales in the Korean burger franchise market, with over 1.29 trillion won, followed by Lotte GRS at 924 billion won and Burger King at 745 billion won.
New taste sensations
Lotteria's revival stems from strategic rebranding, focusing on innovative burgers and a modernized brand identity under the "Taste the Fun" slogan. They also renamed their classic burgers and updated the logo to reflect a more contemporary image.
Its new burger offerings, such as the Jeonju bibimbap rice burger and the king pork cutlet burger, captured evolving consumer tastes, particularly among younger generations.
The bibimbap burger sold 800,000 units in its first month, while the king pork cutlet burger hit 550,000 units in two weeks. These items contributed to a 10 percent sales increase on-year and a 5 percent rise in consumer count in the first quarter of last year.
The squid alive burger also generated significant attention, with its sell-out rate surpassing the monthly sales target within a week, achieving over 700,000 units sold within 11 days of its launch.
The recent talk of the burger scene is the Napoli Mafia mozzarella burger, which sparked a sold-out frenzy following its launch on Jan. 16.
Developed in collaboration with star chef Kwon Seong-jun from Netflix’s "Culinary Class Wars," the burger has boosted the chain’s sales by 33 percent on-year to 30 billion won within the first week of its release, with around 450,000 units sold.
“Lotteria is steadily cementing its identity as a forward-thinking brand,” an industry official said, adding that its creation of distinct K-style burgers has set it apart from its American counterparts.
Store refurbishments
Along with the success of its menu launches, Lotteria has also committed to revamping its outdated image through store renewal.
As part of its relocation strategy, Lotteria closed underperforming stores while focusing on new openings, with well-performing outlets undergoing renovations.
In December last year, Lotteria opened eight newly renovated company-owned stores, which sparked an uptick in both sales and consumer count, according to a company official.
"We plan to enhance the customer experience through store renewals and ensure profitable store management with our renovation efforts," the official said.
The firm also aims to expand its store count to 1,400, up from its current count of around 1,300 stores. As of now, Mom's Touch leads in store count with approximately 1,400 outlets nationwide.
The franchise has also started leveraging technology-driven solutions to optimize efficiency and spur profitability, as demonstrated by the automated patty-cooking and frying robots at its renovated Guro Digital Complex station and Seoul National University station outlets.
Beyond its stronghold in Korea, Lotte GRS is expanding its reach into international markets, building on its existing presence in Vietnam, Myanmar, Cambodia, Kazakhstan, Laos and Mongolia.
It established its US-based corporate entities Lotte GRS USA in 2023 and Lotteria USA in 2024, planning to open its first US store this year. The company is also set to launch its first Lotteria store in Singapore during the second quarter of this year, further advancing its expansion across Southeast Asia.
minmin@heraldcorp.com
