Despite facing labor shortages and rising costs, the F&B industry is hopeful of leaving behind a two-year slump and even thriving.
The Vua Cua restaurant chain’s sales have only recovered to 70 percent of pre-Covid-19 levels. But Doan Thi Anh Thu, its CEO, expects a full recovery and then some by the end of the second quarter.
With hopes high about the future, the chain recently announced plans to open 50 restaurants, including franchises, this year, and 200 next year. It currently has five restaurants and three franchised outlets, but recently received a second round of investment from Do Thi Kim Lien, a judge on the reality show Shark Tank.
After two dismal pandemic years, not only Vua Cua, but also many other large and small players in the F&B industry have begun to signal efforts to attract customers.
In May several large hotel chains organized fine-dining activities.
In May and June more than 20 restaurants affiliated to the Marriott Bonvoy hotels and resorts in Vietnam organized a culinary discovery program with a number of promotions.
The Li Bai Restaurant at the Sheraton Saigon Hotel is celebrating the upcoming Double Fifth Festival on the fifth of the fifth lunar month, which falls on June 3 this year, by launching expensive banh u (pyramid sticky rice cake) at VND140,000 ($6.04) to VND390,000 targeted at people looking to spend big on food again.
The Black Vinegar restaurant, which specializes in Cantonese cuisine, has reopened at the New World Saigon Hotel.
Le Nguyen Minh Man, owner of a Hong Kong hot pot restaurant in the shopping area near Takashimaya and Saigon Square in HCMC’s District 1, says he sees lots of opportunities for the F&B industry.
“After a long period of dormancy, the F&B market has blossomed since the beginning of this year. The number of customers and sales are very high, indicating that the industry is reviving.”
He recently opened a franchise selling deep-fried mushrooms in addition to his existing restaurant.
According to the General Statistics Office, sales for the catering and accommodation services sector topped VND124.4 trillion in the first quarter, a marginal increase year on year but 1.79 percent lower than in the first quarter of 2019.
Revenues for the F&B industry on Payoo, an e-wallet, were 50 percent up in the first quarter compared to the last quarter of last year. The number of transactions had risen by 24 percent.
According to a Payoo spokesperson, growth in the F&B industry will be even higher in the second quarter for two reasons: The pandemic has been successfully contained and so people are feeling more secure and willing to eat out, and the tourism industry has shown encouraging signs.
The long-term outlook for the entire year is also favorable, the spokesperson said.
Securities brokerage VNDirect said the industry would recover and grow at a faster rate than the beginning in 2022, and forecast 10-12 percent growth for the year.
The resumption of dine-in services and the recovery of domestic demand are the primary driving forces.
Nguyen Quang Thuan, general director of trading data provider FiinGroup, made a similar forecast: “The catering and accommodation industry is expected to bounce back as the tourism industry recovers and international tourist arrivals increase.”
Since the country opened its borders on March 15, it has benefited from the return of international tourists. More than 100,000 visitors arrived in April, three times the number in March.
According to Google Destination Insights data, Vietnam and the Philippines are the only two Asian countries among the top 10 in terms of tourism growth in April.
Long Nguyen, operations director of N5 Bar, is excited and grateful for the opportunity to enter the F&B market at this time.
“It is not hard to notice that many brands have vanished in the last three years, particularly in the nightlife business.
“Instead, a slew of new companies have emerged with more interesting business models and better products and services.”
His company is experimenting with a minimalist cocktail bar focused on providing private spaces, and he said customers like it.
But he said there are difficulties in entering this market, one of the being a shortage of human resources.
“In fact, recruiting employees is currently very difficult, partly due to a labor shortage. Employee income expectations have also changed significantly compared to before.”
His company is attempting to optimize operational efficiency, create an appealing working environment and eliminate unnecessary positions.
Thu of Vua Cua said the market lacks unskilled workers, making recruitment difficult.
Some businesses also said that rising input costs are putting them under pressure.
Thu said: “The cost of raw materials has risen significantly, but selling prices have not. Because the story is always like this, it causes a lot of problems for businesses.”
The casual to mid-range dining segment is particularly hard hit.
Man said, “Petroleum, transportation, goods, and ingredient prices have all increased, but customers have a lot of price choices.
“Many people are returning to F&B investment at the moment, making the market extremely competitive.
“However, it is a positive sign for consumers, indicating that the market is improving and offering better quality.”
Source: VnExpress
