30,000 F&B OUTLETS SHUT DOWN IN FIRST SIX MONTHS OF 2024

Vietnam's food and beverage (F&B) market is experiencing drastic changes, with more than 30,000 stores shutting down in the first half of 2024.

As of the end of June, Vietnam had around 304,700 F&B stores, down 4 per cent compared to the same period last year. More than 30,000 stores have closed nationwide, with a limited number of new openings, according to market analysis by iPOS.vn.

The report on Vietnam's F&B market in the first six months of the year surveyed nearly 1,000 restaurants and cafes, alongside more than 2,300 diners and 1,307 F&B employees with different ages and occupations.

Ho Chi Minh City has been the most heavily affected, with a 6 per cent decrease in the number of stores across the city. In Hanoi, the number of stores rose by about 0.1 per cent.

"The first six months of the year were difficult for the economy in general and the F&B industry in particular. We have witnessed a growing number of stores with a short lifespan (less than three months) in big cities," said a representative of iPOS.vn.

However, Vietnam's F&B market still generated nearly VND404 trillion ($16.2 billion) in revenue in the given period, equivalent to nearly 68 per cent of the revenue for the whole year 2023. This is a surprise in light of the challenging economic environment. The significant growth of the total transaction volume is attributable to various promotions launched by F&B stores to stimulate customer demand.

Businesses said they are becoming increasingly cautious about expanding their operations in the last six months of the year. The report by iPOS.vn reveals that 60 per cent of surveyed businesses are trying to maintain their current operational scale, while only 34 per cent plan to expand.

Amidst fierce competition in the food market, businesses are looking for ways to attract and retain customers. Findings show that promotions are an effective tool to increase customer volume for 25 per cent of businesses.

Regarding the impact of Decree No.100/2019/ND-CP on the beverage industry, less than 11 per cent of businesses believe that customers have become accustomed to not driving after drinking alcohol. This shows that changing consumer habits can take time and requires coordination among authorities, businesses, and consumers.

Source: VIR