Tips For Selecting Retail Locations For F&B Brands

Customer Segment Identification

Understanding demand, spending characteristics and local customer profiles is key to business success. Researching customer segments helps to better identify the store location. 

Hoan Kiem & Hai Ba Trung

According to Savills Retail Wise, a report highlighting Vietnamese retail market research, Hoan Kiem and Hai Ba Trung districts are home to government agencies, diplomatic quarters, and multinational companies. They have high densities of office workers, wealthy residents, and tourists. As such, these districts have significant demand for F&B segments that offer high-end experiences, Western cuisine, or Asian food. 

Midtown 

Midtown districts like Ba Dinh, Tay Ho, and Dong Da are the new economic centre. The large customer base comprises occupiers at Grade A office buildings and Japanese and foreign residents with high incomes. This area is suited toward high-end F&B models, pubs, and cafes.  

Western Ha Noi

The western area of Ha Noi, including Cau Giay, Tu Liem, Thanh Xuan, and Dong Da districts, has many schools and the National University complex serving the needs of students and young people for eating, drinking, entertainment, and gathering with friends.

Rental Area

F&B retail spaces must accommodate food preparation areas, storage, and often, spaces where customers can sit and eat. It is essential to consider the F&B business model and its requirements before looking for a retail location.

For example, takeaway restaurants do not require a large seating space as most customers use the store to order and collect. Therefore, a floor area of 10sq m and 30sq m is sufficient.

However, retail brands and large F&B chains looking to open flagship or experience stores often want to use stores to host branding activities and promote online business activities. Thus, these stores need to be large to allow for the creation of unique experiences that can link online and offline presence. Commercial spaces with no or few beams and columns and shophouses with large frontages are favoured.

The storefront delivers the first impression and is key to attracting footfall. A large and eye-catching storefront can help increase the attractiveness of the store.

Business owners should also pay attention to the tenant mix in a shopping mall, ensuring there is a reasonable balance between different types of businesses. Stores also require good ventilation systems and a standard gas pipeline to ensure smooth and safe business operations. 

Types Of Space

Several prime retail spaces for lease include shophouses with street frontages, shophouses, and shopping smalls. While they all have advantages, the choice of location often rests on business requirements and goals.  

Shophouses on Main Roads

Stores located on major roads or main streets in areas with high population densities are favoured. They are easily accessible with high footfall. However, these stores can be loud and are exposed to dust and smoke from the street. Parking is also limited and strictly monitored. 

Shophouses

Shophouses are popular with F&B retailers. These properties combine commercial and residential use and can be a good choice for small, family-run businesses looking for property. These properties are often spacious with high ceilings and are comfortable for F&B services. These properties are often located within residential complexes, which means the  local community drive business. If the population density and footfall are low, this could challenge business.  

Shopping malls

Shopping malls are usually very large and deliver diverse product offerings, including consumer goods, groceries, fashion items, and home appliances. Other features often include restaurants, cafes, and kiosks, and sometimes hotels and offices for rent.

Shopping malls are located to receive regular and high footfall from surrounding residential areas or offices. During holidays or when malls offer promotions, shoppers can increase dramatically. The appeal of shopping malls for many customers is that they are a “one-stop-shop.” They are convenient and transport considerations decrease because they can find all the products and services they need in one place. While this can be advantageous, F&B operators must understand the complexities that can come with shopping mall operations. Competition can be high, which means stores must stand out to appeal to customers. 

Read more: Insights into the attractiveness of shopping malls for retail brands competing in the Vietnamese market 

Store Location

F&B stores should be easy to identify and access, not in a hidden corner, and meet the demand of local customers. For street and shophouse stores, properties with two or wide facades increase visibility and competitiveness. Properties along main roads are also better as this can be used to capture footfall. In shopping malls in Ha Noi, most shoppers enter and exist on the ground floor, making it an appealing destination for retailers to position themselves. Stores opposite the escalator and bathroom receive a high footfall, which is beneficial for occupiers.

Food courts have a variety of stalls and restaurants with different offerings as well as tables and chairs for customers to use to eat. Despite shopping mall regulations regarding operating hours and promotions, stores can take advantage of the diversity in the offering, which drives footfall. 

Prime and easy-to-find locations do, however, come with higher rent. Businesses need to carefully consider their needs and goals when selecting the right property for their F&B product. They must balance costs and forecast revenues to make informed decisions and choose the right location. 

Rental Price & Term

Rent

High rental costs can significantly impact profit margins and investment recovery for F&B businesses. To mitigate this risk, a clear understanding of the budget is crucial. If retail rent exceeds the budget, it may be necessary to negotiate supportive terms with the landlord. This is usually done with the support of expert retail leasing consultants with experience in tenant representation.  

Retail Lease Term

When renting F&B premises, brands must consider lease terms, fit-out time, and initial investment costs. Typically, the minimum lease term is three years, with the main goal of recouping capital within years one and two. However, if a longer lease term can be negotiated, this could support greater stability and allow for a longer period to recover capital. Negotiating a rent-free fit-out of a month can be beneficial to occupiers.  

Legal Regulations

When renting retail spaces for F&B enterprises, legal compliance is essential, with fire safety a particularly important factor for F&B businesses. Shopping malls must have a document of fire protection inspection and approval from the Fire Police Agency for the works specified in Appendix IV issued with Decree 79/2014/ND-CP guiding the Fire Prevention and Fighting Law and the amended Fire Prevention and Fighting Law.

F&B stores must have fire safety equipment like a fire alarm, automatic fire alarm system, emergency lights, fire pump, fire hose, fire protection equipment and accessories, and a fire extinguisher. In addition, the store must comply with regulations on food safety and hygiene, proper waste treatment, and other regulations such as business licenses and operating hours. This helps ensure that business operations are legal, safe and sustainable.

Finding a satisfactory retail space can be challenging, however, experienced retail leasing agents can take the stress out of these processes. With 29 years of experience in Viet Nam, Savills Commercial Leasing provides effective solutions to help businesses develop and succeed in the Vietnamese retail market. For retail tenants, Savills Commercial Leasing service offers market entry consulting, competitor research, legal framework consulting, lease negotiation support and expansion strategy advisory. Our team sources prime retail spaces that consider in-depth analysis, business requirements, and operational goals.

Contact Savills Commercial Leasing for detailed advice or contact via hotline: +84 984 000 468