New bricks-and-mortar stores and a recovery in consumer confidence were key drivers behind the Vietnamese coffee chain’s first quarterly sales rise in 12 months
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Masan Group currently operates 163 Phuc Long Coffee & Tea stores | Photo credit: Khuc Le Thanh Danh
Masan Group will maintain a ‘prudent’ approach to growing its Phuc Long Coffee & Tea business after a recovery in consumer demand for out-of-home food and beverage brands in Vietnam for the first time in 12 months.
Following a 3% fall in revenues last year and 6% decline in the first quarter of 2024, Phuc Long Coffee & Tea returned to revenue growth in the three months ending 30 June, with sales rising 5.3% year-on-year to VND 391bn ($12m).
In a press release, Ho Chi Minh City-based Masan Group said sales growth was primarily driven by the contribution of 15 new bricks-and-mortar stores opened over the last 12 months. The business opened four new Phuc Long Coffee & Tea stores in the second quarter to reach 163 sites.
The retail conglomerate has been closing underperforming Phuc Long Coffee & Tea kiosks within its WinMart supermarket network since the start of 2023 in response to lower-than-forecast sales and sustained macro-economic challenges for food and beverage businesses in Vietnam.
Masan Group forecasts Phuc Long Coffee & Tea’s like-for-like sales will further improve in the second half of the year amid a recovery in consumer confidence and as new standalone stores gain traction.
Following a slowdown in 2023, the Vietnamese economy has showed signs of recovery this year, with the General Statistics Office reporting 6.4% year-on-year GDP growth in the first six months of 2024. The Hanoi-based government agency also estimated total retail sales of consumer goods and services in the seven months to 29 July 2024 rose 9% year-on-year to reach VND 3.62qdn ($142bn).