Food industry considers survival plans as Covid-19 spreads

By Vien Thong   August 2, 2020 | 01:07 am PT
Food industry considers survival plans as Covid-19 spreads
A motorbike driver rides past closed businesses in Ho Chi Minh City amid a nationwide social distancing campaign to curb the spread of the novel coronavirus in April 2020. Photo by VnExpress/Quynh Tran.
Food and beverage businesses are trying to figure out survival strategies amid the renewed local transmission of Covid-19.

Hoang Tien, founder and CEO of cafe chain Coffee Bike, said the resurgence in Covid-19 cases worries him since the nationwide social distancing campaign in April had badly affected his business.

Coffee Bike, which operates a network of stores and vendor carts, has seen revenues at its cafes fall by 15-20 percent after the outbreak.

Tien is considering a switch to online if another social distancing campaign is imposed.

He is among many businesspeople in the food and beverage industry who are concerned about another bout of social distancing since restaurants and coffee shops will be among the first to be shut down if large numbers of cases are recorded in big cities like Hanoi and Ho Chi Minh City.

As of Sunday Vietnam has recorded 144 Covid-19 cases since the pandemic resurfaced on July 25.

Industry insiders fear this next wave will cause major difficulties for their businesses since most of them are still trying to recover after revenues plummeted in the first two quarters.

89’s Presso, a coffee shop in HCMC’s District 1, has only recently seen revenues recovering to half the pre-pandemic levels.

"We are concerned about the new cases as our business only reopened a short time ago," a spokesperson said, adding that if social distancing is imposed in the city revenues would surely plummet.

Nam Khuat, owner of Kin Dee – Thai Gastropub restaurant in the same district, said July was the first month since social distancing in April when revenues were at pre-pandemic levels.

If there is social distancing again, he would have to negotiate a reduction in rents, cut staff working hours, let part-time employees go, and increase online sales to survive, he said.

Revenues from lodging and food and beverages in the first seven months fell 16.6 percent year-on-year to VND281 trillion ($12.1 billion), according to the General Statistics Office.

In HCMC it was almost three times the rate at 45.1 percent, while it was 24.5 percent in Da Nang and 18.9 percent in Hanoi.

The figures could worsen in the second half if another social distancing campaign is imposed, pushing the food and beverage industry into another crisis, Hoang Tung, CEO of restaurant chain Pizza Home, said.

But demand remains strong because major cities, except Da Nang, have not had a large number of cases, and the economy is recovering thanks to the government’s quick efforts to contain the pandemic.

Businesses that have survived are likely to survive the next wave too since they have experience now, he said.

Tung’s own strategy was to close down inefficient outlets, reduce production costs and rents and increase online sales.

Industry insiders also want the government to give them advance notice this time so that they can prepare to close down. Last time they were forced to close within a day of being informed.

Vietnam has had 590 Covid-19 cases, 212 of them active.

go to top