Lotte Group’s restaurant business unit, Lotte GRS, has told Korea Times that it will close its Lotteria fast-food chain in Vietnam after leaving Indonesia last year.
But the message from the company’s management in Vietnam is markedly different. The local subsidiary posted a message on Facebook and other social-media channels on Saturday saying the information was incorrect, and that it actually planned to open another 10 stores this year, boosting its network to 270.
In Seoul, Lotte GRS said the group’s food material supplier in Vietnam was also being closed down. It said the business had suffered heavily from the impact of the Covid-19 pandemic, a curious comment given Vietnam’s domestic-oriented retail business has been largely unaffected by the pandemic with only one three week-long lockdown imposed since March last year. Deliveries continued throughout the pandemic, with only periodic restrictions imposed on the number of diners eating on site.
Lotteria Vietnam did not generate any profit for the Lotte last year, when its estimated book value fell from US$23.9 million early in the year, before falling to US$13.9 million after recognising US$10 million in depreciation.
“Lotteria Vietnam and others have met the requirements for closure starting this year,” a Lotte GRS official told Korea Times.
But a Lotteria representative in Vietnam told local media the report resulted from “a misunderstanding of information from the South Korean press” and it is working with the parent company in Korea to clarify the new strategy of the group. However, certainly Lotteria will continue operations in Vietnam.
“It is true that Lotte GRS is leaving the Indonesian market but we are continuing with our franchise and food-retail businesses in Vietnam,” the Lotte GRS official later confirmed.
Lotteria Vietnam now has more than 260 company-owned outlets across the country and says a factory in Long Hau Industrial Park will help it supply an expanded restaurant network.