Changes in the Dining Out Market: Burgers on the Throne, Pizza in Crisis

Unpacking South Korea’s Consumer Landscape in a Single Meal: The Massive Shift Triggered by Delivery Apps.

• Discover the successful strategy of burger brands targeting both value-for-money and premium markets simultaneously.
• Analyze why the pizza industry faces challenges amid the rise of single-person households and the frozen food market.
• Forecast the impact of digital transformation and changing consumer values on the future dining market.

Have you ever scrolled through a delivery app on a Tuesday night around 10 PM, hesitating between a 10,000-won handmade burger set and a pizza nearing 40,000 won? This small dilemma encapsulates the massive current shifts in South Korea’s dining out market.

This is not just a change in taste. It is the complex result of the explosive growth of single-person households, tightening wallets in a high-inflation era, and consumer psychology prioritizing personal satisfaction. While one side thrives with smart strategies, why is the other, once the king of dining out, now in crisis? Let’s uncover the hidden story.

1. The Rise of the Burger Empire: A Perfect Victory on Two Fronts

The success of the hamburger market is not due to a single strategy but the clever dual-front approach conquering both value-for-money and premium markets.

The Value-for-Money Revolution: Burgers for Everyone

‘Mom’s Touch’ and ‘No Brand Burger’ led a popular movement under the banner of ‘value-for-money,’ not just cheap burgers. Their core strategy was to penetrate ‘alleyway markets’ overlooked by big corporations, targeting students and budget-conscious office workers.

Notably, Mom’s Touch surpassed Lotteria in 2023 with over 1,400 stores, becoming the industry leader. The legendary ‘Cyburger’ and the ‘After Order’ system, where food is prepared post-order, established a clear differentiation by reinforcing the perception of ‘fresh and proper food.’

This shows that modern consumers’ idea of ‘value-for-money’ is not just about low price. It is a sophisticated value proposition combining affordable price, generous portions, freshness, and accessibility, delivering the satisfaction of ‘smart consumption’ in a high-inflation era.

Premium Invasion: Burgers as a ‘Small Luxury’ in Daily Life

On the opposite end, premium brands like ‘Shake Shack’ and ‘Five Guys’ elevated hamburgers from mere meals to coveted ’experiences.’

Their key weapon is uncompromising quality. Five Guys’ ‘Three No’s’ principle—no freezer, no microwave, no timer—and selling the authentic American taste without localization resonated with trend-sensitive Korean consumers. Though a 17,000-won burger is expensive, it provides special satisfaction as the ‘most affordable luxury,’ clearly illustrating the ‘small luxury’ trend.

The Incumbents’ Counterattack: How the Giants Adapted

Established players like ‘McDonald’s’ and ‘Burger King’ did not collapse; they reinforced their empires through innovation.

McDonald’s became the winner of the ‘untact’ era with explosive growth in drive-thru (DT) services during the COVID-19 period. Burger King successfully implemented a hybrid strategy with digital transformation through its app ‘King Order’ and premium menu launches like the ‘Angry Truffle Whopper.’

2. Pizza’s Ordeal: Missing the Times

While the burger empire expanded its territory, the pizza kingdom walked a path of decline. This tragedy stems from products and business models failing to read the times.

The Price Barrier and the Rise of Single-Person Households

The biggest reason for hesitation over pizza is the ‘price barrier’ hovering between 30,000 and 40,000 won. But the more fundamental issue is pizza’s nature as a ’large dish meant to be shared.’

With 34.5% of households in South Korea being single-person households, a whole pizza is a burdensome choice in both price and quantity. This reveals a fundamental crisis of ‘Product-Society Mismatch.’ Pizza is optimized for four-person families, but society has shifted toward single-person households.

An Unexpected Competitor: The Frozen Pizza Rebellion

The real enemy of franchise pizza emerged in the frozen food aisle of large supermarkets. Once considered a poor snack, frozen pizza has grown into a powerful substitute.

The domestic frozen pizza market exploded from 90 billion KRW in 2019 to 163.5 billion KRW last year. With prices around 5,000 won, portions for 1–2 people, and ultimate convenience, it precisely exploited franchise pizza’s weaknesses. This is a classic case of ‘Disruptive Innovation,’ maintaining ‘pretty good’ quality while dominating cost and convenience.

Internal Issues and Trust Collapse

Pizza’s crisis is not only due to external factors. ‘Pizza Hut’ suffered from conflicts with franchisees, and ‘Mr. Pizza’ faced severe owner risks including the founder’s abuse scandals and the ‘cheese toll’ controversy. These internal problems gave consumers perfect reasons to turn away, accelerating the crisis.

3. The Modern Diner’s Verdict: New Rules of Dining

The contrasting fates of burgers and pizza indicate that the ‘rules’ consumers use to choose food have changed.

Digital Transformation: The New Frontline of Customer Experience

The frontline of restaurants is no longer the cashier but kiosks and app user interfaces (UI). A remarkable 63.0% of burger orders are made through kiosks. This insight means the battleground for customer experience has fully shifted from offline to digital, beyond just reducing labor costs. The future success of dining businesses depends on how smooth and error-free the digital experience is.

Changing Value Equation and the Delivery Fee Dilemma

Why does a 10,700-won burger feel ‘reasonable’ while a 35,000-won pizza feels like a ‘rip-off’? Because value is not an absolute number but a relative ‘feeling.’ Consumers want to feel they have ‘received value exceeding the price paid.’

The invisible tax of ‘delivery fees’ is especially fatal for high-priced items. When a 35,000-won pizza plus delivery fee nears 40,000 won, consumers hesitate before pressing the order button. This creates a ‘vicious cycle for high-priced products’ that pushes consumers further away.

Conclusion

The diverging fates of burgers and pizza clearly illustrate the massive changes in South Korea’s dining out market.

• Key Summary 1: Burger success is the victory of a dual strategy targeting both ‘value-for-money’ and ‘premium.’ It captured all consumer segments by addressing both ends of the market.
• Key Summary 2: Pizza’s crisis stems from a ‘Product-Society Mismatch.’ Its product form and high price do not fit the era of single-person households.
• Key Summary 3: The future dining market hinges on ‘personalization’ and ‘digital experience.’ Brands offering convenient, satisfying solo experiences will survive.

Amid these changes, ‘GoPizza’ offers new hope with single-serving sizes, reasonable prices, and food tech using AI and automated ovens. This signals not the death of pizza itself but the end of outdated methods.

Call to Action (CTA): Next time you open a delivery app for dinner, ask yourself, “Why am I choosing this menu?” Your choice holds the key to understanding all the answers behind these dining market changes.