Will Starbucks overcome Mega Coffee by opening stores until 10 pm?
Leading coffee chain counters low-cost franchises with unprecedented strategies
A noticeboard shows the operating hours of a Starbucks store in Seoul, Monday. Yonhap
SCK Company, a Shinsegae Group subsidiary operating Starbucks coffee shops in Korea, has announced plans to keep at least 80 percent of its roughly 2,000 stores open until 10 p.m. in a return to prepandemic hours.
The nation's leading coffeehouse chain made the decision amid intensifying competition with fast-growing budget coffee shop brands. Prior to this latest measure, SCK had also introduced discount promotions for customers ordering decaffeinated beverages in the late afternoon and for those making purchases twice a day.
"We have decided to extend operating hours and launch related promotional events to fulfill our responsibility of providing spaces where customers can stay comfortably anytime," an SCK official said.
While the company described the change as a "normalization" of hours, many see it as a direct response to the aggressive expansion of smaller rivals.
According to the Financial Supervisory Service, SCK posted sales of 3.1 trillion won ($2.2 billion) and an operating profit of 190.8 billion won last year, the highest among Korean coffee shop operators.
A Twosome Place ranked second in sales with 520.1 billion won, followed by Annhouse, which operates Mega MGC Coffee, with 466 billion won.
People walk past a Mega MGC Coffee store in Seoul, April 1. Yonhap
In terms of operating profits, however, Annhouse overtook Twosome with 107.6 billion won in 2024, a 55 percent year-on-year increase. Twosome posted 32.7 billion won in annual operating profit, up 25.3 percent. SCK's operating profit rose 36.5 percent from the previous year.
As of the end of last year, the number of Mega stores reached 3,420 — far exceeding Starbucks' 2,009 locations in Korea.
Mega's rapid expansion poses a challenge to Shinsegae Group Chairman Chung Yong-jin's plan to open 100 new Starbucks locations in Korea this year. He announced the plan amid SCK's status as the group's third-largest revenue-generating subsidiary.
To bolster its presence, the company is introducing further strategies to attract nighttime customers and improve service efficiency.
Last month, SCK began testing self-service kiosks at Starbucks stores in Myeong-dong, one of Seoul's busiest tourist districts. Since late 2023, some locations have also adopted wireless buzzers to notify customers when their orders are ready.
These steps mark a significant departure from the U.S. headquarters' long-held emphasis on in-person ordering. Starbucks has traditionally championed personal interaction, encouraging baristas to take orders face-to-face and call out customer names when delivering drinks.
However, the U.S. headquarters sold its entire stake in the Korean operation in 2021, allowing E-mart, Shinsegae Group's discount store chain, to become the majority shareholder and take full control of the local Starbucks business.