Why are a series of once-famous food brands in Ho Chi Minh City gradually falling apart?

(Dan Tri) - Many F&B (food and beverage) brands in Ho Chi Minh City that were once loved by young Vietnamese people have withdrawn from the market one after another, leaving regrets for consumers.

For example, Hot & Cold - a milk tea brand associated with the memories of the 8x and 9x generations - officially said goodbye after 14 years of operation. A few days earlier, the Dodo Pizza restaurant chain from Russia also quietly closed all branches in Ho Chi Minh City. Or Comebuy, a milk tea brand from Taiwan, also announced its cessation of operations after 8 years of presence in Vietnam.

Businesses "struggling" due to premises costs and changing tastes

According to the report of the General Statistics Office, Ministry of Finance , in the first quarter, 78,800 businesses withdrew from the market. In addition, according to a report from iPOS.vn - a unit specializing in providing technology solutions for the F&B industry - the cost of renting premises in Vietnam currently accounts for 25% to 55% of a store's revenue.

According to the report, the ratio of rental costs to revenue is 2-3 times higher than the global average. This pressure has forced 35% of large chains to close, especially those with "prime" locations.

A series of brands that have been associated with Ho Chi Minh City for many years have announced their closure (Photo: Social Network).

According to a report from Savills Vietnam, the average rental price of retail space in townhouses in the first quarter was 10-20% lower than before the pandemic. Although landlords have offered many incentives such as keeping prices unchanged for a long time, extending payment schedules, reducing deposits, etc., vacant space is still common, even in prime locations.

Previously, many big brands in the F&B industry in Ho Chi Minh City also had to withdraw from prime locations due to pressure on rental costs. The Coffee House closed a series of large branches, Starbucks gave up its "diamond" location on Ham Nghi Street (District 1).

Besides the story of the premises, today's youth prioritize drinks that are good for health, have high aesthetics and express personality. Instead of being loyal to old brands, they seek new, personalized experiences.

Van Hau (a third-year student at Ho Chi Minh City University of Law) expressed regret when he heard that the Hot&Cold milk tea brand announced its closure. From a consumer perspective, he said that this brand has long been out of step with Gen Z trends and lost its appeal due to lack of competition.

"Old designs, high prices, while the market has many better options," said Mr. Hau. In the past 6 months, he has prioritized choosing healthy, accessible and affordable drinks.

Similarly, Luyn Da (a second-year student at Ho Chi Minh City University of Transport) - who used to be a die-hard pizza fan, said she is no longer associated with Dodo Pizza. According to her, this brand has not caught up with the tastes of young people, while the marketing strategy still lacks highlights to create an impression.

Without innovation, famous brands will also decline.

Master Do Huynh Lam Thinh, Lecturer of the Faculty of Marketing & Communication, Hoa Sen University, commented that the fact that many F&B brands that were once popular with young people have withdrawn from the market one after another reflects a major change in the industry.

According to Mr. Thinh, the decline of some F&B brands stems from two main reasons: increasingly fierce competition between domestic and international brands, along with economic downturn pressure causing a clear decline in purchasing power.

Referring to the phenomenon of once-famous brands gradually being forgotten, he said that this is not only the result of mistakes in internal strategy, but also an inevitable rule in the development life cycle of a brand.

“Any business or brand will enter a period of decline if it does not continuously innovate in both products and operations,” he emphasized.

In addition, rapid changes in consumer tastes, especially from young customers, also make many old strategies obsolete. In that context, businesses will easily be left behind by the market if they do not adapt promptly.

Without innovation, F&B brands are easily left behind by the market (Photo: Comebuy).

Mr. Thinh believes that to maintain competitiveness, F&B businesses need to be steadfast in their core values, while flexibly grasping new trends in products, distribution channels and communication strategies. These are key factors that help brands maintain their position in the market.

In the long term, Mr. Thinh recommends that businesses should continuously reinvent their business models, aiming to create unique experiences that match the expectations of the younger generation of customers.

This adjustment not only enhances the value customers receive, but also helps optimize operating costs, thereby building a sustainable competitive advantage in an ever-changing market.

Master Le Anh Tu, Lecturer of the Faculty of Public Relations - Communication, University of Economics Ho Chi Minh City (UEF), said that many F&B brands emerged thanks to trends but soon declined due to lack of innovation and not really understanding customer needs. "A trend usually only lasts a few months to a few years. When curiosity passes, the number of customers will decrease sharply due to loss of interest," he analyzed.

For long-standing brands, the big challenge is the slow change. Appearance and operation can easily become outdated if not updated regularly. Meanwhile, Vietnamese consumers tend to love new things. In the market, there are more and more young, modern brands operating according to international standards. Therefore, old brands are forced to renew themselves, even should innovate every year to keep up with consumer trends.

Regarding operations, Mr. Tu believes that rental costs should only account for 20-30% of revenue, and less than 20% is even better. In Ho Chi Minh City, business premises can be divided into 3 groups: inner city, developing districts and suburban areas, in which the central area always has the highest costs.

However, he stressed that location is not the deciding factor. “Product quality is still the core factor. Besides, the ability to grasp marketing, take advantage of social networks and operate effectively,” he said.

Source: https://dantri.com.vn/kinh-doanh/vi-dau-loat-thuong-hieu-an-uong-dinh-dam-mot-thoi-tai-tphcm-dan-roi-rung-20250617080747556.htm