In the volatile business context, many businesses have cut back and closed ineffective business premises instead of trying to maintain and expand the number of sales points as before the pandemic. Most recently, a large enterprise specializing in the business of electronic equipment and phones plans to close about 200 ineffective stores in the fourth quarter of 2023.
According to some retail and branding experts, during the economic downturn, the rental price of street-front premises is still too high while there is a shift in business models and changes in consumer behavior, causing a wave of closures and returns of premises located on major streets in Ho Chi Minh City to increase.
In addition, the situation of cramped roads, heavy traffic, narrow sidewalks, small frontage (4-5m), lack of parking but expensive rental prices have caused many brands, big and small, to "run away".
More and more vacant street frontage land is being left vacant in Ho Chi Minh City. Photo: Le Tinh
Mr. Tran Le Nguyen, CEO of KIDO Group Corporation, which is operating two commercial centers, Van Hanh Mall (District 10) and Hung Vuong Plaza (District 5) and a large distribution system nationwide, pointed out that in addition to the cost of renting premises, tenants also have to pay for deposits, repairs, design, equipment investment, fixed personnel... to suit their brand/business.
"Instead of using all profits to pay rent and store operating costs, many businesses pay for the premises and focus on developing online sales to increase business efficiency," said Mr. Nguyen.
The shift in transactions from offline stores to online is making the storefront no longer as important as before.
Mr. Nguyen Tat Thinh, founder of Housezy Joint Stock Company, also believes that retail stores are facing great competition from online sales, but stores with favorable locations will still survive well and have a certain position in the real estate rental market. Industries such as hairdressing, restaurants, beauty salons, etc. are required to use premises and cannot do business online.
"Retail stores with prime locations will still survive because fashion brands still seek out such stores to display products, build brands, and affirm their brand positions... In addition, stores selling food, drinks, hair salons, and beauty salons still prefer stores with prime locations for the convenience of customers, and the nature of their work also makes it impossible to do business online," said Mr. Thinh.
Mr. Thinh analyzed that each facade for rent has its own value and serves each separate customer segment. In case the facade owners cannot rent it out, they will convert it into another function such as office for rent.
Source: https://nld.com.vn/kinh-te/dua-nhau-tra-nha-mat-tien-vi-thieu-cho-dau-xe-20231127154757436.htm
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