Tet cheer muted as Hanoi restaurants, pubs see few customers

The usual festive cheer has been markedly absent at Hanoi’s restaurant chains and pubs in the run up to the Lunar New Year holiday (Tet), usually the peak time for business during the whole year.

The lack of business has many of them to cut staff and some have even downed shutters and returned the premises to the landlords.

The end of a lunar year is typically a thriving time for restaurants and pubs as the demand for food, drinks and parties increases sharply before Tet. However, the last two years have been different.

The atmosphere at famous restaurants in Hanoi in recent days has been one of quiet gloom, with no diners.

Several pub and restaurant owners in Hanoi told The Investor that in addition to the difficult economic situation and people tightening their belts, strict alcohol-related regulations have deterred many people from going out.

The fear of being fined has led to a sharp decline in revenue, they said.

Tran Van Canh, manager of Hai Xom Beer, one of the largest beer restaurant chains in Hanoi, said that the number of diners coming to the restaurant has fallen sharply since the beginning of the year due to many factors such as economic recession or authorities tightening alcohol testing activities.

"Our restaurant chain's revenue fell by about 30% last year… And this year, many branches have had to cut staff to reduce costs. To stimulate demand, we have launched promotions and discounts continuously, but the situation has not improved much," Canh said.

Quoc Cuong, owner of the Cuong Hoi Beer restaurant on Trich Sai street in Tay Ho district, said that despite “trying every way” to attract customers and increase sales last year, the restaurant's revenue still plunged about 50% year-on-year.

"Every year, the days near Tet were the peak time to serve large and small groups of guests organizing year-end parties, but this year is even worse. Many customers have cancelled even after making bookings over worry about facing alcohol testing when driving to work the next morning," he said.

Thu Hang Beer, another large restaurant chain in the capital, has also experienced a decline in revenue. Nguyen Manh Duc, manager of the chain, said that the number of customers coming to the restaurant over the past year have reduced by nearly 70%, forcing the chain to reduce its branches from six to four now.

"Low revenue makes it difficult to pay for premises. Last year, we had to close two facilities and return the premises in Vo Chi Cong and Lieu Giai streets," Duc said.

Beer, liquor sales down

According to the Q4/2023 financial statement of Hanoi-based brewer Habeco, listed on the Ho Chi Minh Stock Exchange (HoSE) as BHN, its revenue fell 9% year-on-year to VND2,246 billion ($92.24 million).

The company's pre-tax profit also decreased 7.2% year-on-year to VND89.2 billion ($3.66 million), but after-tax profit increased 24% to VND64 billion thanks to corporate income tax reduction.

For the whole of 2023, BHN earned revenues of VND7,757 billion ($318.56 million) and after-tax profits of VND355 billion ($14.58 million), down 7.7% and 30% year-on-year, respectively.

Meanwhile, Ho Chi Minh City-based brewer Sabeco (HoSE: SAB), reported Q4/2023 revenues of VND8,581 billion ($352.8 million) and after-tax profits of VN966 billion ($39.7 million), down 15% and 10% respectively year-on-year.

For the whole year, the company earned revenues of VND30,461 billion ($1.25 billion) and after-tax profits of VND4,255 billion ($174.74 million), down 13% and 23% year-on-year, respectively.

The Hanoi Liquor And Beverage Joint Stock Company (Halico), registered on the Unlisted Public Companies Market (UPCoM) as HNR, which makes Hanoi Vodka, posted 2023 net revenues of VND32 billion ($1.31 million), down 11.7% year-on-year.

The company also suffered a loss of nearly VND10 billion ($410,678) in 2023, marking its 8th consecutive loss-making year.

Most beer and wine dealerships have also imported goods in moderation instead of the large quantities they ordered in previous years.

Huu, owner of a beer and beverage dealership on Nguyen Khoai street in Hai Ba Trung district, said that this year’s beer purchasing power has been very poor. Compared to previous years, orders and sales fell 30-40%, he said.

Huu said that for Tet, many businesses typically order large quantities of beer boxes as gifts for partners and employees, but this year, he only received orders from a few units with “thin quantity.”

Hien, another beer and beverage dealer located on Quan Nhan street in Thanh Xuan district, said this year's sales volume has dipped 70-80% compared to previous years.

"The amount of beer products sold at the moment is even lower than during the Covid-19 epidemic, because the demand for beer, especially bottled draft beer, then was high even though people had to stay at home," she shared.

Business responses

Beer and other liquor producers responded to the situation by looking at ways to cut costs.

Habeco cut advertising and promotion costs to VND579 billion ($23.8 million) from VND700 billion in 2022.

Sabeco cut similar costs from VND451 billion in 2022 to VND378 billion ($15.5 million) in 2023.

Nguyen Van Viet, chairman of Vietnam Beer, Alcohol & Beverage Association (VBA), falling revenue and empty restaurants and eateries have impacted the alcohol industry.

"Not only Hanoi, restaurants in many other localities across the country have also faced the same fate, cutting costs and even returning premises.

The difficult economy, people cutting their spending and strict implementation of the government's Decree 100 on alcohol concentration have caused this situation,” Viet added.

The VBA chairman acknowledged that strict control of alcohol concentration for drivers to ensure traffic safety was necessary.

However, he said that the alcohol industry needs policy support because it has contributed very well to the state budget, created jobs for workers and promoted the development of related industries.

Therefore, it is necessary to have solutions to ensure public health and traffic safety without causing severe difficulties for any economic sector.

"Currently, the VBA, alcoholic beverage manufacturers and ride hailing companies are planning to cooperate in forming a support fund to reduce fees for those who transport drinkers," Viet said.

He said the absolute ban on alcohol concentration in drivers’ blood or breath should be reconsidered in the draft Law on Road Traffic Order and Safety so that they match reality and international practices.