The coffee chain has reported lower than expected sales and outlet growth amid lower consumer confidence in Vietnam
Masan Group plans to make Phuc Long the largest coffee and tea chain in Vietnam | Photo credit: Phuc Long Coffee & Tea
Phuc Long Coffee & Tea has reported its first decline in quarterly revenues since retail conglomerate Masan Group became a majority shareholder at the start of 2022.
Reporting on the three months ended 30 June 2023, Ho Chi Minh City-based Masan Group said Phuc Long’s total revenues fell 14% to VND 372bn ($15.6m) alongside a 33% decline in EBITDA to VND 63bn ($2.6m).
The retail conglomerate said a challenging trading environment for food and beverage brands in Vietnam was hindering sales and outlet growth.
Following robust 2022 sales, Masan Group revealed plans to open at least 75 new flagship Phuc Long stores in 2023. However, the business has only opened three outlets in 2023 to date to reach 114.
Masan Group cut its full-year outlet growth forecast to 25-30 new outlets and will instead focus on improving sales within existing stores and kiosks.
Phuc Long Coffee & Tea’s flagship sites achieved positive revenue growth of 4% in the first half of 2023 to reach VND 581bn ($24.5m).
In a bid to enhance the coffee chain’s overall productivity, Masan Group has continued to rollout a ‘hub and spoke’ model which redirects online orders to nearby kiosks during peak hours.
Under the model, Masan Group said average daily sales were up 40% in the first six months of 2023 compared with the pre-conversion performance.
“We are singularly focused on giving consumers what they want. Consumers are starting to recognise and reward us for our consumer-centric innovations – membership, retail formats, and FMCG products. I am sure we will see the tailwind in the second half of the year, which will set the growth foundation for 2024,” said Dr. Nguyen Dang Quang, Chairman of Masan Group.
In February 2023, Masan Group said it was seeking to make Phuc Long Coffee & Tea the largest coffee and tea chain in Vietnam ‘within a few years’ and was laying the groundwork for potential international expansion.
Masan Group is a Vietnamese investment holding company primarily involved with the distribution of food and beverage products. The conglomerate operates the WinCommerce retail network, comprising Phuc Long, the WinMart supermarket chain, financial services firm Techcombank and pharmacy Dr.Win. Masan Group also manufactures and distributes a range of food and beverage products under its Masan Consumer Holdings division.