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The Great Restaurant Reset: Over 30,000 Eateries Shutter Their Doors.

22 August, 2024

On August 21, at the “Vietnam F&B Summit 2024” conference organized by iPOS.vn – a company specializing in providing management solutions for the F&B industry in Ho Chi Minh City, iPOS.vn released the “Report on Vietnam’s F&B Industry in the First Half of 2024.”

According to the report, as of the end of June 2024, there were approximately 304,700 food and beverage establishments in the country, a decrease of nearly 4% compared to 2023. At least 30,000 stores nationwide have closed while new openings are limited. Ho Chi Minh City was the most affected area, with a nearly 6% decrease in the number of stores, while Hanoi still saw a slight growth of 0.1%.

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“This is a challenging period for the economy in general and the F&B industry in particular. The number of short-lived stores (operating for less than 3 months) is increasing in large cities. This period is considered a major purge” – the report stated.

Despite the challenges faced by the F&B industry, revenue surprisingly reached VND 403,900 billion, achieving 68.46% of the revenue for the whole of 2023. This is partly due to inflation and the significant growth in the total number of transactions as F&B stores launched many promotional programs to stimulate demand.

One notable point is that the prolonged hot weather has brought business opportunities for beverage companies. Specifically, 21.7% of surveyed businesses affirmed that they had made significant profits thanks to the increased consumption of beverages during the prolonged heat waves.

However, in general, F&B businesses are cautious about expanding in the second half of the year. According to the survey, 61.2% of businesses aim to maintain their current business scale, while only 34.4% plan to expand to new premises in the same period last year, compared to 51.7% of F&B businesses with similar ambitions.

F&B Exhibition on the sidelines of the conference on the morning of August 21

On the consumer side, economic difficulties did not significantly affect the dining-out habits of Vietnamese people. Instead of reducing spending on eating out, customers still maintained their dining-out frequency but became more planned and less impulsive in their spending.

According to the survey, the high-frequency groups (3-4 times/week, daily) remained almost unchanged compared to 2023. At the same time, the group of customers with a frequency of 1-2 times/week tended to increase by 4.1% compared to the previous year. Overall, loyal customers still maintained their dining habits, showing the strong appeal of the F&B industry.

The report also showed that the average lunch price for customers ranged from VND 31,000 to VND 50,000 per meal (accounting for 61.4%, compared to 47.7% in last year’s report), while lunches priced at VND 30,000 and below became less common as businesses faced challenges in maintaining operations, indicating an increase in lunch costs for customers.