The New Normal: Brewing a New Coffee Culture at Home

As of the end of June, the country recorded approximately 304,700 restaurants, a 4% decrease compared to the same period last year. At least 30,000 restaurants have shut down, with a limited number of new openings.

According to Mibrand’s report, there are over 500,000 coffee shops across the country, ranging from small street-side cafes to modern coffee chains. In contrast, iPOS.vn’s survey focuses solely on F&B stores, excluding mobile carts.

Ho Chi Minh City experienced the most significant impact, with a 6% decline in the number of establishments across the city. In Hanoi, there was a slight growth of 0.1% in the number of stores. Notably, a higher number of short-lived stores (closing before reaching three months of operation) are observed in major cities.

Some prominent F&B brands have also announced branch closures recently. The Coffee House chain simultaneously shut down its outlets in Can Tho after more than five years of operation and plans to do the same in Da Nang after over seven years. Additionally, several branches in Hanoi and Ho Chi Minh City have quietly exited the market.

The first Starbucks Reserve store in District 1, Ho Chi Minh City, recently announced its closure after seven years of operation.

Despite the decrease in the number of stores, the industry’s revenue remains impressive, reaching over VND 400,000 billion, equivalent to 68% of the total revenue in 2023. This can be attributed in part to inflation, with the consumer price index (CPI) increasing by 4.08% year-on-year and core inflation rising by 2.75%. Additionally, restaurants have been offering various promotional programs to stimulate demand, according to iPos.

Interestingly, the challenging economic conditions have not significantly impacted the dining-out habits of Vietnamese consumers. The number of people dining out daily, 1-2 times a week, or 3-4 times a week has increased compared to the previous year. However, there has been a significant decrease in both the frequency and spending on coffee; the proportion of people spending over VND 100,000 per drink has dropped sharply from 6% to 1.7%. The price range of VND 41,000 – 70,000 per drink has become more common.

Consumers are also reducing their coffee shop visits due to increased work pressure, with 41.7% of respondents indicating they only occasionally go for coffee, and 32.3% visiting cafes 1-2 times a week. The financial constraints have led consumers to be more cautious about spending on non-essential services.

The report also highlights a cautious approach among businesses regarding expansion plans. In the second half of the year, 60% of surveyed enterprises aim to maintain their current business scale, while only 34% plan to open new outlets. This contrasts with the same period in 2023, when nearly 52% of F&B businesses had similar expansion ambitions.