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BUSINESS REPORT

Differing 540,000 food and beverage businesses, includ-
ing 430,000 street vendors, 80,000 restaurants,
and 22,000 cafés and bars, according to Dcorp
dining options R-Keeper, a global company that provides
technological solutions to food and beverage
businesses. The number has not improved
significantly in the last three years. Mr. Ngo
Fast-food has maintained its potential in Vietnam but players said that one of the key challenges remains
need to adjust to the changing circumstances.
securing the right location at the right price.
T LINH LAN REPORTS “This is no easy feat in Vietnam, where real
estate rentals have not eased as much as
hoped and will likely climb once again as we
proceed further into 2021,” he explained. A
recent report from real estate consultants
Savills on the retail market noted that average
ground floor rentals were $40 per sq m per
month in Hanoi in 2020 and $50 in Ho Chi
Minh City.
Mr. Ngo also pointed out that fast-food
brands relying on a significant amount of
imported raw materials will continue to face
significant challenges, as this drives up the
end-price for consumers, and consumers in
Vietnam, as with many parts of Asia, are
price sensitive. “The key challenge, though,
will be to recruit, train, and retain employees
in an industry that is renowned for having a
very high attrition rate,” he added. “When
employees leave, there are significant costs
for companies to recruit and re-train new
PHOTO: VIET TUAN
employees. While there are many more chal-
abits surrounding fast-food have with families and young people (60 per cent), lenges, these are among the key concerns for
changed significantly over the last and menu variety (56 per cent). fast-food brands.”
H 10 or 15 years. It was not that long In terms of outlet numbers, Lotteria leads Specifically, consumers are increasingly
ago that the choice almost entirely consisted with 151, followed by Jollibee with 115, accord- paying more attention to nutritious food,
of Vietnamese food like “pho”, “banh mi”, ing to a Statista Research Department study organic food, and healthy and convenient
and other noodle and rice dishes. “Today, released in late 2020. Upon opening its first ingredients. A quick survey conducted by Viet-
the younger generation enjoys brands such outlet in Vietnam in 2014, McDonald’s nam Report at the end of last year revealed
McDonald’s, Burger King, KFC, Texas Chicken, attracted 20,000 customers and earned that amid the Covid-19 pandemic, 50 per cent
Pizza Hut, Domino’s, Starbucks, Coffee Bean VND1.5 billion ($70,000) in revenue in the of customers spent more on food that enhances
& Tea Leaf, and many more,” Mr. Sean T. first two days. At that time, it had an ambitious the immune system as well as clean, healthy
Ngo, CEO and Co-Founder of VF Franchise plan to open 100 outlets within a decade. Six choices. Food businesses in general have had
Consulting, told VET. “As incomes rise so years on, though, it has just 23. to increase their operating capacity by about
will demand for better and more sophisticated Market observers have said that fast-food 30 per cent compared to before the pandemic.
offerings in the restaurant industry overall chains are now experiencing slower growth. And market researchers Euromonitor
and fast-food in particular.” Three years ago, there were 7,000 fast-food noted in a recent report that international
outlets around Vietnam; a relatively insignifi- players dominate the limited-service restaurant
Market review cant number given the country has some market in Vietnam, since local independent M
The fast-food business comes in many
forms, including pizza, burgers, culinary serv-
ices, bakery, and ice cream. Experts said that LEADING FAST-FOOD BRANDS IN VIETNAM, BASED ON STORE NUMBERS, 2020
of these, restaurant chains specializing in Lotteria 151
chicken are one of the largest segments in Jollibee 115
terms of revenue. GogiHouse 113
KFC is by some distance the most frequently King BBQ 99
visited fast-food chain in Vietnam, with 45 KFC 94
per cent of respondents visiting often, accord- Pizza Hut 94
Kichi-Kichi
ing to a survey conducted by Ho Chi Minh Hotpot Story 41 86
City-based market researchers Q&Me in 2020. The Pizza Company 35
Following is South Korea’s Lotteria, with 17 Domino’s Pizza 34
per cent of the 600 respondents, then US Al Fresco’s 32 0
chains Pizza Hut and McDonald’s, both with Manwah 27
6 per cent. The leading reasons cited for favor- Texas Chicken 26
ing KFC were delicious food (66 per cent), Popeyes 26
convenient location (63 per cent), suitability Source: Statista Research Department

28 | VIETNAM ECONOMIC TIMES | APRIL 2021