Street shops lose business to big foreign chains Vietnamese-owned street food shops are losing ground to big foreign chains that have stronger financial capability.   Hai, an owner of a restaurant on Le Van Sy street in district 3, HCM City, for example, is considering selling his restaurant after two years of taking losses. After investing billions of dong into the special food shop two years ago, Hai thought he would have losses for no more than 12 months and would break in another 12 months before making a profit in the third year. However, his shop has not performed well. Hai has to compete with big rivals nearby, including KFC, Domino, Tra Tien Huong and Duong Ba Ho Dessert, which have outclassed his small restaurant. “I thought they (the big rivals) would not be my direct rivals, because my restaurant only sells specialty food originating from the central region. However, I later realized that the shops’ positions, brands and capital will determine success,” Hai said. The investor said the expenses for rent and interior decor gobbled up 30 percent of the initial investment capital. Another 20 percent of capital was spent on equipment and furnishings, while the remaining 50 percent was spent on the workforce, materials and food. “I would rather sell the restaurant to recover a part of my investment capital. I don’t have any money to maintain the business,” he said. Phuong, the owner of a bar on a small alley of Pham Ngu Lao street in District 1, has also incurred losses over the last year. “The bar was usually crowded in the first months after the opening, but it later became deserted. Only 50 percent of seats were occupied over the weekend,” Phuong said. “As I have small capital, I have to put the bar at a disadvantageous position,” he explained. “My rivals, who have more powerful financial capability and more experience, can get more advantageous retail premises and usually run sale promotions. Therefore, they can attract many customers.” He said he can adapt to the circumstances as the lease still has a few years left, or he can sell the bar. Trang Minh Ha, head of the Training Division of Thien Minh Hospitality Group, noted that the expansion of large-scale F&B (food and beverage) chains have dislodged shops out of the market, like “big fish swallowing small fish”. According to Jonathan Hanh Nguyen, a businessman who has brought five international F&B brands to Vietnam, retail chains increase their presence in Vietnam by expanding. In some cases, franchisees have to pledge to open certain numbers of shops within certain periods. The expansion of the F&B chains will inevitably force locally-owned small shops to either to shut down or shift to other market segments to avoid direct confrontation. VNE