Foreign fast-food chains rack up losses in Vietnam
Foreign fast-food chains in Vietnam are chalking up heavy losses despite strong revenue and opening new branches, according to local news source Thanh Nien.
South Korean fast-food chain Lotteria’s annual financial losses remain high despite sales of US$55.6 million to $64.1 million per year.
In 2015, the brand reported a loss of US$5 million on $62.4 million revenue. Two years later, the losses reduced to $855,000, while sales hit $65.4 million, according to figures obtained by Thanh Nien.
Entering Vietnam in 2004, the Lotte subsidiary had lost $18.5 million by the end of last year, about the same as its authorised capital.
Lotteria credited most of the deficits are due to selling expenses, which account for 50 to 55 per cent of the corporation’s revenue.
Rival chain Jollibee, from Philippines, has a similar story to tell, having accumulated losses of $17 million to date, just under $400,000 shy of its authorised capital.
Other foreign chains including Pizza Hut, The Pizza Company, Burger King, Domino’s Pizza, McDonald’s, and Popeyes have also reported consecutive losses, according to Thanh Nien.
The only chain to report a profit until now is KFC, which has reported a profit of US$4.4 million on revenues of $59 million last year.