SEOUL, Jul. 17 (Korea Bizwire) — Food chains in South Korea are rushing to introduce more self-service kiosks as part of efforts to cut costs amid the country’s rising minimum wage, industry sources said Tuesday.
The nation’s tripartite wage commission of government, management and labor decided Saturday to jack up the minimum wage for 2019 by 10.9 percent to 8,350 won (US$7.40) per hour from the current 7,530 won. The 16.4 percent increase rate for this year was the biggest in about two decades.
Lotteria, South Korean retail giant Lotte’s fast-food chain, said the company is seeking ways to cope with the expected hike in the minimum wage, including the simplification of management work.
Currently, Lotteria operates self-service kiosks, where guests scan the bar codes of their items and pay, at 750 out of its 1,350 stores across the nation.
Those cashierless shops accounted for some 40 percent of Lotteria’s sales in March this year, up from 24.1 percent last year and 8.6 percent in 2015.
“Given the recent growth pace of self-service kiosks, the ratio is expected to surpass the 50 percent mark this year,” a company official said. “Yet it is still difficult to expect the number of new kiosks since they are installed on request from store owners.”
Lotteria is not alone. Fruit juice franchise Juicy has been introducing more self-service kiosks as part of efforts to help its store owners cut back on labor costs.
In October last year, two Juicy shops went cashierless for the first time, with the number of such stores rising to 17 at the end of last year. An additional 33 outlets set up self-service kiosks this year.
“Most owners of the stores that introduced self-service kiosks are satisfied with the fact that they can reduce labor costs,” a Juicy official said. “A self-service kiosk can have an effect of replacing 1.5 part-time workers per store, resulting in a reduced monthly cost of up to 3 million won.”
Nearly 100 Juicy stores are expected to have self-service kiosks by the end of this year, he added.
South Korean hamburger chain Mom’s Touch has also jumped on the bandwagon. In May, the chain installed self-service kiosks at about 20 stores in provincial cities.
Mom’s Touch, which has a nationwide network of about 1,300 stores, said it will seek to make more shops cashierless in an effort to help them operate more efficiently and boost customer convenience.
Fried chicken franchise KFC Korea Co., which introduced self-service kiosks at five outlets in Seoul last year, said it has plans to install those gadgets at all its shops amid rising mobile and online orders.