The move of the store from the prime location of the two brands McDonald's (2-2A Tran Hung Dao, District 1) and Starbucks Reserve (11-13 Han Thuyen, District 1) has surprised many people.
On September 17, several websites posted information about renting space at 2-2A Tran Hung Dao, District 1 for VND300 million/month. Contacting a broker who posted this information, this person said: "The contract is signed annually, the price has increased compared to previous years because of the convenient location and more crowded traffic."
According to Lao Dong Newspaper, the situation of returning business premises in the central area of Ho Chi Minh City is still happening. Compared to mid-2023, this situation has decreased, but many stores have "changed owners" many times because they could not stay after a short time.
On busy business streets in Ho Chi Minh City such as Nguyen Hue, Ly Tu Trong, Nguyen Trai… it is not difficult to see vacant rental premises.
"Many brands accept to rent premises in expensive locations to increase their recognition, along with the increase in raw material prices, which pushes up the cost of food and drinks. However, at this time, people tend to save money, so when shopping, they will calculate carefully and tend to choose to shop on electronic applications instead of going to the store," said Mr. Nguyen Quoc Cong, owner of a restaurant in District 1.
Faced with the situation of increasing rental prices while consumers tend to cut back on spending, Mr. Le Hoang Anh - manager of a sushi restaurant located in District 7 - shared that he previously had another branch in District 3. However, due to the high rental price, not enough to cover expenses, he was forced to return the premises at this branch.
“The rental price of my premises in District 3 at that time was about 3.4 million VND/m2. Every month, I had to bear a huge amount of money for an area of nearly 50m2. After a short time, I had to cut losses by returning the premises, consolidating them to only 1 branch, and at the same time strengthening the construction of an online sales channel,” said Mr. Hoang Anh.
The costs have not decreased and the rent has increased, forcing Mr. Phan Thanh Quang Thien - manager of a yogurt shop in the center of Thu Duc City - to add costs to each product sold. This means that the price of each product will have to increase by 5,000 - 10,000 VND.
“After a while of applying this method, I found it was not promising because the number of sales each day tended to decrease. After that, I also returned the premises and looked for another business direction,” Mr. Thien added.
According to the iPos.vn report on the food business market in Vietnam in the first 6 months of 2024, Ho Chi Minh City has reduced the number of stores in the whole city by 5.97%. The number of stores with short lifespans (less than 3 months of operation) is happening more in big cities.
