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HCMC eateries tweak business models as customers remain wary of Covid

By Vien Thong   November 26, 2021 | 05:30 am PT
HCMC eateries tweak business models as customers remain wary of Covid
A chef prepares food at a Singaporean restaurant in Ho Chi Minh City, November 2021. Photo courtesy of Harry Ang
Food and beverage businesses in HCMC are changing their business models to focus on delivery and takeaway and reducing prices to adapt to the new situation.

Vinh San’s seafood restaurant in Phu Nhuan District reopened last month, but only manages to fill 30 percent of its covers while still paying nearly $2,000 a month in rent.

The number of online deliveries has gone up by 50 percent from pre-pandemic levels, but commissions and fees payable to food ordering platforms mean he suffers losses.

"I intend to [close down] and switch to delivery only," San said.

Crab restaurant chain Vua Cua has suspended plans to open in new locations and instead focuses on delivery and selling to supermarkets.

It has been able to find franchisees for the delivery model and tie up with a big supermarket chain, CEO Doan Thi Anh Thu said.

"We no longer have headaches like dealing with finance and human resources issues. Instead, we focus all our energy on helping franchisees sell".

The Coffee House chain last month unveiled a kiosk model that only sells takeaway. The kiosks are located inside convenience stores and on main roads.

These are among the efforts made by food and beverage businesses to survive at a time when people are reluctant to gather in crowded places and incomes have fallen.

Last month food and beverage sales fell by nearly 93 percent year-on-year even as the city resumed most activities.

Upmarket Singaporean restaurant chain Lion City decided to move into the affordable segment after revenues plunged 70 percent during the social distancing period.

Owner Harry Ang has closed three out of four outlets, with only the 13-year-old first restaurant still open.

"The average rent was VND240 million per location per month and we cannot keep paying," he said.

He plans to open an affordable restaurant early next month with prices at VND100,000 or less per dish at a smaller location and with a rent of around VND15 million.

"We will switch from offline to online services with more comfortable prices".

He plans to return to his upmarket model later, he said.

Other F&B chains are also reassessing their plans to open new outlets.

Opening in new locations would depend on the post-pandemic situation, a spokesperson for Starbucks said.

"I believe other companies will also have to be more prudent in doing business in the new normal".

 
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