30,000 food, beverage stores shut down in H1

By Dat Nguyen August 22, 2024 | 04:20 pm PT

Over 30,000 food and beverage outlets closed down in the first half of 2024 as consumers cut down on visits to cafes, a company that consults the industry said.

There were 304,700 food and beverage outlets as of June-end, down 3.9% from the end of last year, iPOS said in a report.

There was a surge in the number of outlets that closed within three months of opening, especially in large cities, according to the company’s CEO, Vu Thanh Hung.

Even well-established brands with a loyal customer base took a hit due to the economic downturn. "The F&B industry experienced six challenging months. Many businesses had to leave the market."

Yet the industry’s revenues climbed to VND409.90 trillion (US$16.44 billion), or two thirds of that of full-year 2023.

iPOS attributed this to the 4.08% inflation and surfeit of promotions offered by the F&B industry. Its survey of over 2,300 consumers in Hanoi and HCMC found only 1.7% willing to spend more than VND100,000 on a drink, compared to 6% in the same period last year.

iPOS said this possibly impacted brands such as Starbucks, %Arabica and The Coffee Bean & Tea Leaf, which sell high-priced drinks. Almost 31% preferred beverages costing VND41,000-50,000 as opposed to 25% last year.

A survey of 951 stores in Hanoi and HCMC found that only a third of them plan to expand. Last year the ratio had been more than half.