“[This] is not a year on which I shall look back with undiluted pleasure,” said the British monarch Queen Elizabeth famously in 1992. “It has turned out to be an annus horribilis”. Although referring to the tribulations and misfortunes of her family, it’s a phrase that in certain respects could also be applied to Vietnam.
It’s been a recurring theme this year — the economic slowdown, the stalled construction projects, issues with self-expression, doom, gloom, more doom and even more gloom. According to Nielsen Vietnam, consumption has also been hit. Fearing tough times ahead, nine out of ten Vietnamese are changing their spending habits to save more. And while during the third quarter of 2012, the global consumer confidence index increased by a point, suggesting a recovery is on its way, in Vietnam there was a dip of 8 points. The biggest concern, says Nielsen, were increasing utility bills. It’s a typical sign of a struggling economy — rising costs, consumption on the fall, money hard to come by.
Yet, one industry seems to have fared remarkably well. Or at least, it has the appearance of faring well: food and beverage. One of the supposed recession-proof industries — the others include healthcare, the skilled services provided by plumbers, electricians, hair stylists and the cinema — the obsession with eating out and making regular visits to watering holes, from bia hoi on the street through to rooftop bars on the top of office blocks, seems to be far from abating.
Burger King and Subway are here. Domino’s is starting to expand, Coffee Bean & Tea Leaf is increasing its presence, as is Pizza Hut, Trung Nguyen, Tous les Jours, Al Fresco’s, Baskin Robbins and Lotteria. Nationwide, KFC now has well over 100 stores. Starbucks is even due to open its first café this month in Ho Chi Minh City. On the face of it, these various, relatively inexpensive international food and beverage chains seem to be faring well.
Let Me Entertain You
As the western press has constantly pointed out, during periods of deprivation such as a recession, people feel fully justified on spending on more cost-conscious forms of entertainment. So, rather than travelling business for their annual vacation they will fly economy. Instead of flying with Singapore Airlines they’ll travel with AirAsia, and if they go to a rock concert — as Status Quo’s Rick Parfitt was quoted as saying on a recent article on the BBC website — "they will fork out the cost of the ticket but be less likely to spend on merchandising."
In Vietnam the notion of entertainment transforms itself to the country’s favourite pastime: eating out and drinking with friends. And yet, the number of non-affiliated bars, cafes and restaurants that seem to be sprouting up is nonsensical. There was a period when Word was able to keep up with the new openings. But such is the volume, especially with all the food courts working their way into Vietnam, that it’s now become impossible. The question, though, is how will everyone survive? Surely we’re hitting saturation point.
According to a recent Cline Group study of restaurants in Dallas, Texas, 23 percent of all start-ups failed within their first 12 months. An additional 14 percent closed in year 2, while 7 percent shut up shop in year 3. Which all suggests that as reality bites, this little boom may be short-lived. The fro-yo, or frozen yoghurt explosion a few years ago, is a prime example of such saturation. Within a space of a few short months, from nowhere there seemed to be a fro-yo store on almost every Ho Chi Minh City street corner. Now there is a noticeable absence of this ‘healthy’ ice-cream alternative.
As for Queen Elizabeth, though, 2012 couldn’t have been a better year. Early in the summer she celebrated 60 years on the throne and then a month or so later was seen jumping out of a helicopter at the opening ceremony of the London Olympics. An annus mirabilis?