Many premises along busy streets in Hà Nội and HCM City remain empty or closed. — Photo diendandoanhnghiep.vn
HANOI: At the end of August, many were surprised to hear that Starbucks closed its first and only premium Starbucks Reserve store in Ho Chi Minh City on Han Thuyen, district one after seven years of operation despite the shop being a popular destination due to its prime location and beautiful views.
Starbucks Vietnam did not mention any specific reason for the closure, but rumours suggest the rent has become too high, at 750 million dong per month, nearly double the rate from seven years ago for a three-floor building of 210 sq m each opposite 30/4 Park and close to Notre-Dame Cathedral Basilica of Saigon.
Starbucks Reserve Han Thuyen would need to sell 200 to 300 cups per day to cover the rent only, not taking into account other costs.
This is a problem not only affecting Starbucks. Many brands have also recently closed their stores at prime locations.
Organic food brand Danny Green recently rented a building on Ly Tu Trong Street at Phu Dong Roundable in district one, Ho Chi Minh City at the rent of no less than 700 million dong per month to sell organic fruits and vegetables. Four brands rented the building then quit within five years.Phuc Long closed their store there in 2019 after five years because the rent was raised from US$14,000 to US$25,000. Soya Garden and PhinDeli rented the building at around US$25,000 then closed their stores in just around one year. Suitcases and bags brand Mia rented the building at US$26,000 per month from November 2022 to March 2024.
Highlands Coffee also closed a shop at the corner of Nguyen Du and Pasteur streets. YEN Shushi closed a restaurant on Dong Khoi.
There are dozens of prime locations in major cities which are convenient for brand recognition, but the rents are often quite high.
These super-high-end premises are only for businesses with their own strategies such as brand recognition, while for businesses that only want to make profits from selling products and services, it will be very difficult to survive.
High rents in a struggling economy forcing businesses to close offline stores is not a new thing but has been happening since the Covid-19 pandemic. Many premises along busy streets in Hanoi and Ho Chi Minh City remain empty or closed. — Viet Nam News/ANN
