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Drive-Thrus Driving Up Business in Korea

October 7, 2013

McDonald’s Added 22 Quick Service Restaurants in Korea This Year

Lotteria, Angelinus Coffee, CU follow trend

By Park Ji-won

McDonald's added 22 drive-thrus in Korea this year.

McDonald’s added 22 drive-thrus restaurants in Korea this year.

Quick service restaurants are increasing the number of drive-thrus locations they operate in Korea as demand for the convenient service is growing in line with a rise in car ownership.

American fast-food franchise McDonald’s had 311 restaurants in Korea as of Sept. 17, 114 of which have drive-thrus. McDonald’s has been increasing its number of drive-thrus since 2010, opening 22 of them this year.

Drive-thrus allow customers to order and pick up products or services without leaving their cars. It was first introduced in the United States in the 1930s.

“McDonald’s has been expanding this platform in line with its customers’ changing lifestyles and the rising number of cars,” explained Ryu Ji-eun, an official with McDonald’s Korea.

The expansion is part of the firm’s overall strategy in Korea. “It is part of our future strategy to include drive-thrus in up to 70 percent of all McDonald’s stores in Korea by 2015,” said Korea Managing Director Joe Erlinger during a news conference in June.

Likewise, Lotteria, the fast-food franchise of Lotte Group, opened its 29th drive-thru in May in Haeundae, Busan. “Lotteria’s business strategy of drive-thrus isn’t the same as that of McDonald’s. We provide them in order to increase customer satisfaction and in a bid to diversify our services,” an official at Lotteria said.

At Lotteria, individual store owners have the authority to provide drive-thru service.

Angelinus, a coffee shop franchise of Lotte, has introduced six drive-thru stores as of Sept. 27. The firm added three of the six this year. It was the first coffee shop to open with a drive-thru facility. “We are interested in making unique stores,” official Yoon So-yeon said.

CU, the No.1 convenience store in terms of number of stores, also opened a drive-thru location in August 2012 as a test case to determine the profitability of the new business. “When I am in a hurry and do not want to get out of the car, I drop by a drive-thru because I can get my meal faster than when I walk into a restaurant,” said 27-year-old office worker Yoo Woong-chae.

A rapid rise in car ownership is driving the new trend. According to data from the Ministry of Land, Infrastructure and Transport, the number of registered cars rose significantly over the past decade from 14.50 million in 2003 to 18.87 million last year, an increase of 29 percent. The ministry anticipates the figure will reach 20 million in 2015.

“The move to introduce drive-thrus is seen as an expansion strategy by leading franchise companies,” Daishin Securities analyst Ian Chung said. “Drive-thrus could be a good solution to boost sales in the sluggish industry,” Chung added.