Kyochon hit again for 'deceptive' marketing campaign

A pedestrian walks past a Kyochon Chicken restaurant in Seoul in this March file photo. Newsis

By Park Jae-hyuk

Kyochon F&B, which was criticized last month for offering a 3,000 won ($2.30) discount after hiking the prices of its most popular items a month earlier, is facing criticism once again for its latest marketing campaign, according to industry officials, Sunday.

The fried chicken franchise operator decided recently to carry out another discount event, offering discounts up to 4,000 won to its customers who make purchases during the first nine days of June, July and August. However, the benefit is given only to those who spend at least 25,000 won to buy boneless chicken items.

Customers, therefore, need to buy the Signature Boneless Set worth 33,000 won, or purchase at least two boneless items from the menu, to qualify for the discount. In addition, the discount is offered only to those who made at least two orders in the previous month after signing up for Kyochon membership through the company's mobile app.

These difficult requirements led many consumers to believe that the latest discount event is intended to appease consumers who are already frustrated over its previous price hike ― and to clear inventory of unpopular boneless items. Some consumers claim that Kyochon is making a fool of its customers once again.

In response, Kyochon explained it is typical for companies to carry out conditional discount events.

However, the fried chicken franchise has faced boycotts from consumers complaining about its previous price hike in April. The company is also drawing complaints for being Korea's first fried chicken franchise that started charging for delivery services.

Amid the worsening public sentiment, Kyochon F&B's first-quarter revenue dropped 8.2 percent year-on-year to 120.4 billion won. Its operating profit also fell 32.4 percent to 5.9 billion won during the same period.

As Kyochon suffered a decline in its sales after the price hike in April, it will likely face additional falls in its revenue and operating profit during the second quarter.

Last year, Kyochon, after maintaining its position for more than a decade as Korea's leading fried chicken franchise in terms of sales, was overtaken by competitor bhc.