Lotteria Vietnam reports $5 million loss in 2024

Lotteria Vietnam reports $5 million loss in 2024

South Korea's Lotte Group has revealed that Lotteria Vietnam, the operator of a fried chicken and fast food chain, lost over $5 million last year.

This is the second consecutive year that Lotteria Vietnam has suffered a negative net profit, and around 23 per cent higher than in 2023. The loss in 2024 is also its heaviest, excluding the Covid-19 pandemic. Since then, Lotteria has only made a profit in 2022.

Lotteria has been present in the Vietnamese market since 1998. According to Lotte Group's 2024 financial report, the fast food chain has 253 stores across the country.

Lotteria's business results are following the market trend. A survey by iPOS, a platform providing management solutions for more than 100,000 restaurant and cafe businesses and more than 4,000 food and beverage (F&B) firms, shows that 34.3 per cent of businesses struggled in 2024. Of which, 14.3 per cent of respondents reported a serious decline in revenue (down 20 per cent at least on-year), while 20 per cent fell by 5-20 per cent but still maintained operations.

The F&B industry is having its profits eroded due to the pressure of increasing costs. 44.8 per cent of respondents said that raw material costs account for 30 per cent or more of the selling price, and 6.2 of them had costs exceeding 50 per cent, pushing profit margins into danger.

According to iPOS, the rising cost of raw materials is due to many factors, including inflation, rising transportation costs, scarce supplies, exchange rate fluctuations, and rising labour costs. Some F&B businesses have increased their prices by 5-15 per cent, optimised products and menu quantities, found new suppliers, and applied technology to manage costs.

VIR