From the "big players" to the "smaller ones," they're closing down one after another.
In recent days, many coffee lovers in Ho Chi Minh City have expressed regret at seeing the PhinDeli coffee shop at the corner of Cong Truong Quoc Te (opposite Con Rua Lake) closed. Located in a prime location with a spacious area and a large, airy outdoor seating area, PhinDeli was a familiar meeting place for office workers and was often crowded. On its official website, the brand confirmed that it would be moving to a new location from May 23rd, after nearly two years of operation at that location.
Previously, the PhinDeli cafes at the intersection of Nguyen Du and Dong Khoi streets, with a direct view of Notre Dame Cathedral, and at the Phu Dong roundabout successively vacated their premises, causing many to express concern about the "survival" of the coffee chain belonging to Nova F&B (NovaGroup). Following in the footsteps of PhinDeli, Saigon Casa Cafe also announced its departure from its location at 7 Pham Ngoc Thach Street, effective May 23rd.
PhinDeli Cafe near Turtle Lake closes down after relocating.
Speaking to Thanh Nien newspaper on the morning of June 21st, a representative of NovaGroup confirmed that Nova F&B, a company specializing in providing food and beverage services at projects developed by NovaGroup, has been acquired by a Singaporean company. Both parties are currently finalizing the transaction procedures. Nova F&B's system currently operates 46 stores (primarily in Ho Chi Minh City) under 18 well-known brands such as Saigon Casa, Marina Club, The Dome Dining & Drinks, Dynasty House, PhinDeli, Mojo Boutique Coffee, Carpaccio, Shri Restaurant & Lounge, Tib, JUMBO Seafood, Crystal Jade Palace, Gloria Jean's Coffees, Sushi Tei, etc. A source indicated that after being acquired by the Singaporean owner, Nova F&B will be managed and operated by IN Hospitality and is expected to be renamed IN Dining. Although NovaGroup asserted prior to the transaction that the Nova F&B chain of stores and products were operating quite stably and that the sale of Nova F&B was part of the group's overall business restructuring plan, not due to a lack of customers, it cannot be denied that the restaurant and food service industry in Ho Chi Minh City is still facing many difficulties.
Following the closure of PhinDeli at the Nguyen Du - Dong Khoi intersection, its "neighboring" cafe, Mellower Coffee, also announced its permanent closure in Ho Chi Minh City to its loyal customers. This is a famous specialty coffee chain from China, established in 2011, with over 50 stores worldwide . Its first store in Vietnam opened on Le Duan Street (Ho Chi Minh City) in 2019.
Not only are major coffee brands withdrawing from the race, but many owners of smaller shops with much lower rental costs are also facing the prospect of selling their businesses. Recently, TT posted on his personal Facebook page an advertisement seeking a buyer for his nearly 100 m² coffee shop in Tan Binh District for 135 million VND. He stated that besides family commitments preventing him from managing the business, the main reason for selling is a sharp decline in profits.
"I tried to weather the pandemic, hoping for a quick recovery, but even though economic activity has returned to normal for over a year, business is still very difficult. Regular customers still come for coffee every day, but they no longer invite friends to gather as often as before. Or some people who used to stop by every day to buy a cup of coffee or a glass of juice are now unemployed and just buy their own coffee instead of coming over. In general, it's difficult, and I'm pursuing a different path, so I'm selling it to someone else who has more time to invest and focus on the business," Mr. T shared.
Even pubs are in a bad situation.
With the economic downturn, many people have almost completely cut back on eating and drinking before even saving money on coffee, causing many restaurants and eateries to struggle. "At this rate, I'll probably have to go back to my hometown, carrying my buffalo first and my plow following behind, because I can't hold out any longer; I'm on the verge of bankruptcy," lamented Mr. H. Minh, the owner of a seafood restaurant in Binh Chanh District. According to Mr. Minh, many businesses are cutting salaries and bonuses, leading to a drop in workers' incomes, so people are limiting their spending on food and drinks. Furthermore, stricter regulations under Decree 100 mean no one dares to go out to eat and drink anymore. Mr. Minh's restaurant has seen a 50% drop in customers.
"My place sells very cheaply, but now there are no customers. A few plates of snails, a few bottles of beer, and a plate of roasted pork would only cost 200,000 - 300,000 dong, but now people are just drinking at home, not even having a few hundred thousand dong. Meanwhile, regulations are tightening up everywhere. Not only Decree 100, but also fire safety, environmental regulations, food hygiene and safety... everything is difficult to deal with," he lamented.
Located in District 1 – the city center – Thanh Dan's goat restaurant still receives a steady stream of tourists, compensating for the decline in regular customers. However, Thanh Dan faces a greater challenge than H. Minh in terms of the high rent. Before the pandemic, a monthly rent of 45 million VND wasn't a major issue, and his restaurant was consistently profitable. However, since the pandemic, the rent has increased to 50 million VND per month, while customer numbers have decreased significantly, orders are fewer, and revenue has fallen, resulting in insufficient income to cover expenses, leading to continuous losses.
From a tourism perspective, Mr. Nguyen Huu Y Yen, General Director of Saigontourist Travel Company, stated that the tourism industry's performance has gradually stabilized. Entering the peak summer season, domestic tourists to various destinations are still performing well, and the hotel and restaurant system is recovering quite well. However, the phenomenon of hotel chains, restaurants, and eateries facing difficulties due to a lack of customers is still common in Ho Chi Minh City because the city is not a major summer tourism hub. People are cutting back on spending, eating out less, and dating less. Meanwhile, tourists are not flocking to Ho Chi Minh City; instead, the city is a market that sends tourists to other destinations. Summer is the peak season for domestic tourism, but it is not coming to Ho Chi Minh City. International tourists are entering their low season, arriving at least from September onwards, so the tourism infrastructure and services are still facing challenges.
"In the long term, Ho Chi Minh City needs to transform itself into a tourism hub attracting visitors from all over. To achieve this, the city must develop large, attractive entertainment complexes. Tourists going to Da Nang have Ba Na Hill, those going to Phu Quoc have United Center… Ho Chi Minh City only has Dam Sen and Suoi Tien, so it cannot escape the label of a transit point. If we had Universal Studios, Disneyland, or developed large entertainment complexes, the restaurant and hotel service system would face less difficulty in the summer," Mr. Nguyen Huu Y Yen stated.
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