Bearing losses for many months, what is happening at many restaurants in Ho Chi Minh City?

Close many branches because of unable to bear losses

One day in late June, early July, Ms. Hanh (38 years old, living in Ho Chi Minh City), a familiar beef noodle shop owner, called me for help. She was confused and needed my advice to help her shop overcome the current difficulties.

I don’t understand why business has been so slow these past few months! The quality of the beef noodle soup is still the same, the price hasn’t changed, but I don’t understand why the number of customers has dropped by 40%, it’s not like before. Is there any way to revive the restaurant?

Ms. Hanh, Beef Noodle Shop Owner

Ms. Hanh's restaurant was crowded with customers last year, but this year it is quieter.

I understand the owner's worries, because Ms. Hanh is currently running more than 40 beef noodle shops in Ho Chi Minh City and the provinces of Quang Ngai, Binh Phuoc , Binh Thuan, Vung Tau. Under her, there are more than 100 employees, many of whom are relatives. With the current difficult situation, if not careful, many shops may not survive and many of her employees will also lose their jobs.

With more than 20 years of experience in selling food and drinks in Ho Chi Minh City as well as more than 12 years of opening this Dong Ba Gia Hoi Hoang Kim beef noodle shop, the owner has never encountered a "strange" incident like this year.

She said the price of a bowl of beef noodle soup remains the same, ranging from 35,000 to 50,000 VND, even during the period when gasoline prices increased and prices escalated, she still kept it the same. The owner affirmed that the quality of the bowl of beef noodle soup at the restaurant is still the same, many branches of the restaurant are located on the frontage of major streets in Ho Chi Minh City, but Ms. Hanh does not understand why business this year has become more sluggish than ever.

Ms. Hanh said she is trying every way to revive her beef noodle shop to overcome this difficult period.

“After asking around, I found out that not only my shop, but also many other shops selling food and drinks like mine are in this situation. Before that, I also heard the forecast that the economic situation would be difficult, but I didn't think the shop would be so deserted," the owner expressed.

Regarding the premises, Ms. Hanh said that all the restaurants are rented. Many restaurants are located on the street front so the rent is quite expensive. Luckily, some landlords did not increase the rent, so she continued to cooperate. Some places decided to increase the rent, so she did not continue the contract and moved to other more suitable locations.

Since the beginning of the year, the owner said that 2 branches in her beef noodle system had to close for many reasons, the main one being that business was difficult and she could not bear the loss. Many of her current branches are also in a state of suffering losses, most of the remaining branches have seen a sudden decrease in revenue, making her wonder how to improve the situation.

Many shop owners said that slow business at shops in Ho Chi Minh City is a common situation.

In the current situation, Ms. Hanh said that she cannot wait for the difficulties to pass or continue to suffer losses because of limited resources. She is looking for every way to improve the current situation, from improving the quality of beef noodle soup to launching promotional programs to attract customers.

"Our restaurant has been using delivery apps for a while now, and we will continue to promote it and maybe rely on media support on social media platforms to reach more customers. I guess the difficulties will continue, but we will try our best," the owner predicted.

Can't just sit there and wait to die!

Even though it was Sunday, the BBQ beef hotpot restaurant located at 187 Pham Van Chieu Street (Go Vap District) owned by Huynh Le Hai Hien (25 years old) was empty. Dozens of tables were neatly arranged in the spacious restaurant, but there was only one group of customers.

Looking out at the empty restaurant, the owner sighed and confided that the restaurant had only been open for nearly a year, since the end of 2022. When the restaurant first opened, it was crowded with customers, especially during Christmas and New Year's Eve, so Mr. Hien and more than a dozen restaurant employees worked very hard.

Even though it was the weekend, Mr. Hien's shop was quiet.

Since Tet, to be exact after February, the business of the restaurant has been sluggish, revenue has been decreasing steadily. Compared to last year, the number of customers of the restaurant has decreased by 50%. In the last 3 months, my restaurant has been suffering losses. Last month, I lost more than 20 million VND. This year is also a difficult year for my restaurant, as well as many other restaurants that I know!

Mr. Huynh Le Hai Hien, Owner

Business is difficult, the restaurant is located on a street known as "flood center" in Go Vap, so Mr. Hien said the most miserable days are rainy afternoons. At that time, the street is flooded, there are days when he sells from 3:30 pm to 10:30 pm, but only has 2 tables, the revenue is less than 1 million. For a newly started restaurant like his, that is really terrible.

Unable to let this situation continue, the owner did everything he could to improve the situation. From cutting half of the staff, renting out the shop space in the morning, minimizing input costs, increasing advertising on the fanpage to reach more customers... but still had no clear results.

The owner said that diners' demand for food has decreased since after Tet this year, and the restaurant's revenue has gradually decreased.

"There is a family that is a regular customer of the restaurant, last year they came to eat almost every week. For the past few months, they only come once every 2-3 weeks. When I asked, I found out that he lost his job and she had her salary reduced, so they had to tighten their spending, limiting eating out to save money. I also asked about the quality of the food, and most of the customers said it had not changed, it was just that their need for food had tightened," the owner said.

Unable to continue to sustain losses, he plans to have many promotions and gifts to attract customers in the near future. He also plans to sell some popular beef dishes in the morning with prices starting from 25,000 VND, along with selling dishes with higher prices in the evening, from 200,000 VND like in the past months to improve the situation.

The owner is trying every way to improve the current situation.

Instead of advertising through culinary channels and KOLs, which he thinks are currently not very effective, because every restaurant is facing difficulties and using this method, he focuses on improving the quality of food and taking care of regular customers, hoping that the difficult situation will soon pass.

Similarly, Mr. Thang (60 years old), owner of a noodle shop located on Vo Van Tan street (District 3) also said that difficult business and few customers are a common situation, including his shop.

Pointing to the shops next to him, the owner said that luckily this restaurant is a family restaurant and doesn’t have to rent a space, so it can survive until now. Meanwhile, many other restaurants and bars next to this place couldn’t survive because the rent was high but the revenue wasn’t as expected, so they had to return the space, move into an alley, or temporarily stop operating for a while.

A coffee shop located on the frontage of Dien Bien Phu Street (District 1) which was known to many people when the owner invested nearly 15 billion VND has just closed after a year of business. The owner said that there was a time when he had to bear continuous losses.

With fewer customers, the restaurant owner is also trying to adapt. “In the past, my restaurant sold a lot of dishes, about 30. But now it's only about ten! The more you sell, the more you lose. It's better to sell less and focus on the quality of the dishes,” he said.

Meanwhile, the owner of a grilled pork noodle shop in Ben Thanh market (District 1) also confided that although the current tourism situation is vibrant and bustling, the shop's business is no longer as good as before.

“Difficulties are common, fortunately my shop has been around for more than half a century, many regular customers come to support so the situation is not too bad. But I am also sad, also worried, hoping that in the near future business will return to its golden age like before the Covid-19 pandemic,” the owner said.

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