Although most business resumed after the lockdown was lifted, The Coffee House Signature, a trendy destination of many young Saigonese, has announced its closure.
In early October, Starbucks also announced the closure of its shop at the Rex Hotel, which was a prominent place attracting young people thanks to its prime location in District 1.
Tokyo Deli, a familiar brand of Japanese cuisine in Vietnam, had to close two of five restaurants in Hanoi. This system has three restaurants in Hanoi and nine in Ho Chi Minh City.
The owner of Tokyo Deli chain is Tan Viet Nhat Food Co., Ltd. The first Tokyo Deli restaurant was opened in Phu My Hung, HCM City in 2007. Over the past 10 years, this system has had a total of 20 restaurants, including 15 in Ho Chi Minh City and 5 in Hanoi.
The Sumo Yakiniku chain run by Golden Gate has had to close two restaurants in Hanoi.
Redsun is no exception. Mr. Nguyen Nam Trung, CEO of Redsun, admitted that in November 2020, his company had old debts, and had to pay about 30 billion in rent every month and strengthen personnel continuously after the epidemic.
It is similar for Soya Garden. Up to two-thirds of Soya Garden's 50 stores have closed. Soya Garden is a startup brand developed by Hoang Anh Tuan, who successfully raised VND15 billion for this project in 2017 in the Shark Tank Vietnam prgram.
But closing is not giving up. The decision to close the restaurants is to transform the business model in line with the epidemic situation and meet the changing needs of users.
Everything has changed
The catering and service industries are witnessing changes as many restaurants and coffee shops have closed, including famous brands like Starbucks and The Coffee House, said Vo Thi Khanh Trang from Savills Vietnam.
Hoang Anh Tuan of Soya Garden said the closure of two-thirds of stores of this chain was done to restructure the business and shift to a new business model that saves costs for retail space and staff.
Similarly, CEO Le Ba Nam Anh of The Coffee House said that when the epidemic broke out, customers' buying behavior and attitudes had significant changes, particularly the popularity of take-away. This shows that online shopping will grow strongly, he said.
Expecting to "live" with the epidemic until at least mid-2022, the coffee chain plans to promote cooperation with electronic platforms besides Baemin to respond to new developments.
In recent times, not only youth, but also the middle-aged and elderly have begun to use online shopping.
According to a recent survey by market research company Q&Me, 51% of consumers in Ho Chi Minh City and Hanoi have used an online food delivery app. E-commerce and home delivery services will continue to grow as Covid-19 deeply affects consumer mindsets and buying behavior.
Vu Duc Nguyen, Deputy General Director of Deloitte Vietnam in charge of consumer goods, told the media that when the Covid-19 pandemic broke out, consumers immediately changed their priorities in consumption habits, from “convenience” to “safety”, from “price considerations” to “availability of goods”, from “desire” to “necessity”.
“With the change of priorities, customers seek to buy products from all sales channels. Therefore, retail businesses can take advantage of this pandemic as an opportunity to turn risks into opportunities, and quickly expand and strengthen omnichannel sales," Nguyen said.
Bringing restaurants into the 'cloud'
To overcome the great volatility of the market due to the impact of Covid-19, many sellers chose to start selling online or promoting their business on e-commerce sites or “move to the cloud”.
According to a manager of Grab, the Covid-19 epidemic has spurred change. “We saw the demand for online services increase dramatically almost overnight. This is driving innovation in Southeast Asia, but it is also creating the risk of a digital divide in the region. Small businesses are the backbone of the Southeast Asian economy, yet the vast majority of them operate offline. They need to apply technology and digital transformation, otherwise they will face the risk of being left behind,” he said.
Tran Thi Diem Thuy, Sales Manager of MISA Joint Stock Company, said that restaurants should change their business thinking from traditional models to digital solutions, use suitable software for the restaurant operation process to optimize costs, increase revenue and profit, and ensure safety for both customers and employees.
Although it is difficult, experts said that the industry still has many opportunities to bounce back after the epidemic. The potential of the restaurant business is huge, but it requires investors to change their business model to adapt to the "new normal".
After the fourth Covid-19 wave, only 2 to 3 percent of households indicate that they are doing well. The well-off also tighten their belly and prioritize healthcare and employment.
In the midst of a stressful time of the epidemic, the Ministry of Planning and Investment is developing a program to recover the economy after the pandemic.