Fast food market sees slower growth
The fast food chains that arrived early in Vietnam have seen growth slow, while the chains which came later seem to have fewer opportunities. The heyday of the fast food sector is over.
Having been present in Vietnam since 1998, Lotteria is now considered the largest fast food chain with 211 restaurants in 30 provinces and cities.
A marketing officer of Lotteria said that by the end of 2015, Lotteria had 207 shops, while the figure had been 140 by the end of 2012. This means the Lotteria chain grew by 50 percent within 3 years with 70 new shops opened during that time, or 20 new shops a year.
However, only four new Lotterias were opened in the last six months.
Like Lotteria, KFC set foot in Vietnam very early in 1997 when it opened a restaurant at Sai Gon Super Bowl Shopping Mall. It took KFC a lot of time to familiarize Vietnamese with ‘fast food’ and it incurred losses for the first seven years in Vietnam during which it developed 17 restaurants.
However, after changing the business strategy, the number of KFC shops in Vietnam had risen to 100 by 2011. In 2012-2015, the golden age of the fast food market, alone, KFC opened 40 restaurants, raising the total number of restaurants in its chain to 140 in 18 provinces/cities, i.e. that 10 new restaurants opened each year.
The first Jollibee restaurant opened in Vietnam in 1996, while the number had reached 25 by the end of 2012. The fast food chain sped up in 2012-2015 with 50 new shops opened during that period. The total number of shops had increased to 80 by the end of April.
An analyst said that most of the largest and oldest fast food chains in Vietnam snatched the opportunity to open new shops in 2012-2015, when the market witnessed hot development. Meanwhile, younger chains see unsatisfactory business performance.
McDonald’s, when entering the Vietnamese market in 2014, decided that it would open 100 restaurants after 10 years in Vietnam. However, after two years, it has had only 8 in HCMC and none in Hanoi.
The chain has recently decided to serve Egg McMuffin, Sausage McMuffin with egg, Hotcakes and Hash Browns. “Will Vietnamese favor the food with too many calories which have prices several times higher than a bowl of pho?”