Kyochon announced on the 15th that last year’s consolidated sales increased 18% from the previous year to 4476 billion won. During the same period, operating profit increased by 4% to 41 billion won, the highest in both sales and operating profit since its inception. In particular, operating profit in the second half increased 68% to KRW 25.7 billion compared to KRW 15.3 billion in operating profit in the first half of the year, showing continued growth throughout the year.
Last year, sales of all Kyochon Chicken franchises exceeded 1 trillion won (based on franchisees) for the first time ever. The closing rate was only 0.08% compared to the total number of affiliated stores (1269) in just one store. Sales per affiliate also increased by 14% compared to 19 years. The increase in franchise sales is attributed to the expansion of delivery demand in the non-face-to-face era. In 2020, delivery sales of all Kyochon Chicken affiliated stores rose 21% compared to 19 years.
In response to the growing demand for chicken, the strategy to switch to mid-to-large stores was also through. The sales of chicken at 106 stores that were converted to mid- to large-sized stores last year increased by 26% compared to before conversion. Considering the hall business restrictions caused by Corona 19, it is an analysis that the expansion of kitchen infrastructure following the store conversion was also effective in increasing delivery demand.
Kyochon plans to continue its growth by increasing production per store through the conversion of medium and large stores. If hall operations continue to normalize this year, mid- to large-sized stores are expected to bring structural growth to the domestic chicken business.
In particular, this year, the headquarters distribution center will be expanded to prepare for an increase in the order volume of affiliated stores. In the first half of the year, the metropolitan area distribution center and the southern (Gimhae) distribution center are scheduled to be completed. In the case of the metropolitan distribution center located in Pyeongtaek, it can accommodate an average of 200 tons or more per day with a land area of 5000 pyeong. This is more than two times higher than the existing capacity (about 85 tons). With the expansion of the logistics system, Kyochon plans to lay the foundation for growth in all business areas, including new businesses such as HMR, as well as domestic chicken business.
Kyochon will not only strengthen its competitiveness in the domestic chicken business through the expansion of the distribution center, but also expand overseas expansion, which was temporarily delayed due to Corona 19. Last year, Kyochon’s overseas business generated sales of about 12 billion, an increase of about 35% compared to the previous year despite the impact of Corona 19. Currently, 42 stores are in operation in 6 countries, and plans to enter Singapore, the Middle East, and 9 countries in Africa in the first half of the year.
Kyochon expects 2021 to be a turning point from the global market development stage to the full-scale growth stage. New business results, such as strengthening online business and expanding HMR and processing source business, are also expected to be visible.
Gyochon F&B Chairman So Jin-se said, “2021 is the year to mark the 30th anniversary of its founding, and it is the time when the second leap forward in Kyochon will begin in earnest.” “I will do my best to practice it.”