VietNamNet Bridge - Many more restaurants and food courts have opened recently in Vietnam but poor preparations and lack of professionalism has led to a number of closures. 

The restaurant industry is booming

A report from IFA, a market analysis firm, that restaurant and fast food accounted for 33 percent of the top 10 franchised business fields with the highest revenue in 2016, while the retail food industry accounted for 5 percent.

In December 2017, Decision Lab released a report showing that Vietnamese young people tend to eat out more and are getting more selective, and that young customers have created a boom in the food industry.

However, not all investors can reap fruit in the Vietnamese market. With more and more newcomers, the competition has become stiff. 

It is more difficult to find retail premises in large cities and if they are far from the central area, they will possibly not have good business.

Le Thanh Hoa, a financier, has given up a plan to open a restaurant specializing in central dishes as she could not find any suitable retail premise to lease. 

“If you want retail premises in advantageous positions, you will have to pay sky-high rent. If you choose premises with lower rents, you will have to pay additional money for motorbike parking and under-the-table fees,” she said.

Vietnamese are now willing to spend money to eat out. However, food court developers need to be more professional and knowledgeable about their customers because they now have more rivals.

Another solution was setting up a restaurant in a shopping mall where there is no need to worry about motorbike parking and additional expenses. 

However, after calculating the rent, the discount and investment rate, Hoa decided to give up the plan, because she anticipated the revenue would not be high enough to cover expenses.

But good retail premises are not the only factor for success. 

Le Thi Hang, the owner of a Turkish-style sandwich shop in HCMC, said that consumers are now very selective and up to date with new dishes.

“It is now the digital era, when information can be spread quickly through the internet and social networks,” she explained. 

“If customers do not feel satisfied with your services, the bad reputation will spread and they will boycott you,” she said.

Investors now face many challenges. They need to be more professional in everything, from choosing menus and learning customers’ tastes and habits, to setting up opening hours and creating favorable conditions for customers’ interactions.

According to Lab Decision, the good news is that Vietnamese are now willing to spend money to eat out. However, food court developers need to be more professional and knowledgeable about their customers because they now have more rivals.

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