Highlands Coffee’s small kiosks do not go out to the streets to fight with small traders but mainly sell in front of their stores
A few days ago, a photo of a small Highlands coffee shelf and sold by Highlands staff on the sidewalk at Dinh Tien Hoang Street – in District 1 caused a stir. There are discussions like “what is called Lowlands but Highlands now” or “big brands that bring products to the street to sell to compete with small merchants”.
However, after we interviewed 2 employees at Dinh Tien Hoang store, it was learned that Highlands will not bring cars to the street to sell, but only sell in front of Highlands Coffee shop. That means the shop space behind them is about to build Highlands coffee shop. The two employees also revealed, Highlands Coffee has just deployed a few shelves and is in the process of testing this model.
The premises behind this coffee shop will soon be opened by Highlands Coffee. Photo: FB
Unlike the shops, the small stalls of Higlands Coffee will open very early – around 7am, to serve office people to work early; The price of coffee sold at the counter will be cheaper than in the shop, for example: a large size iced coffee cup on a small shelf will be the same as the price of a small cup in the store, about 29,000 VND. In addition to coffee, Highlands Coffee stalls also sell powdered coffee.
A few days later, we passed the same ground again at the end of the afternoon, when the sidewalk coffee shop had been removed and many Highlands Coffee employees came in and out of the store, it seemed like they were doing business. in preparation to open a new shop.
If it is true to the words of Highlands Coffee staff, it is clear that this move of Highlands Coffee is not new. Before Covid-19, there were several F&B brands in the city. HCM does that, most typical is McDonald’s.
McDonald’s has already brought a small kiosk with hambuger and coffee for sale in front of its store at Hoang Dieu Street – District 4. However, this new model may not work or depend too much on the store location, so McDonald’s is still not replicating on its chain.
Not only Highlands Coffee, but also many other large F&B chains are on the street
Savings and optimization are the two words that many business owners must keep in mind every day after Covid-19. Even a well-known chain of pubs in Ho Chi Minh City, Ba Gac, rented out their entire premises in the morning on major real estate forums – something that rarely happened before Covid-19.
F&B chain brand Ba Gac wants to rent out premises in the morning.
Therefore, it is not difficult to understand when after Covid-19, many F&B chains accept to overflow the street, not interested in more vile language. It seems that all business owners realize: the most important thing is how much money they have each month, not in luxury houses or dusty streets.
Putting a small counter in front of your restaurant can help businesses have more income while taking advantage of the expensive space that has been rented. With the characteristics of traffic and consumer culture in Vietnam, people are afraid to stop and park their cars to go to a certain store to buy food and drink in the morning, they like to buy at the shelves along the road – yes can not be more hygienic than in the shop but more convenient. So, if you want to get more sales in the morning, there’s no other way than brands to flood the street.
Apart from Highlands Coffee, McDonald’s also has Ong Bau and Otoke Chicken eager to bring the counter to the street.
Recently, the brand Otoke Chicken has also piloted a few shelves serving breakfast to customers on the sidewalk in front of its stores. For breakfast, Otoke Chicken mainly sells hamburgers and coffee. Like other F&B brands, this new model is also being tested by Otoke Chicken, if effective, it is likely to be deployed on a large scale by this business.
Otoke Chicken also opened stalls to diversify sales channels.
In all, Mr. Bau is the brand that focuses on this model the most. The reason they dare to set the goal of having 10,000 Ong Bau branded cafes by 2022 is based on the strong development of small shops and street kiosks. In addition, Mr. Bau is also a pioneer in the movement of placing small kioks in front of big shops.
After Covid-19, franchise chains that want to develop well need to optimize site costs and diversify revenue channels.
At a recent franchise seminar, according to expert Nguyen Phi Van: “For sustainable development, franchisors need to rethink cash flows, diversify revenue channels, prioritize making more profits for partners, encourage franchisees to invest in multiple branches and digital transformation.“.
In the cash flow mindset, you need real light space. That means businesses must regularly check whether the premises that we have are spending a lot of rent, too large or not optimal or not. This is a question that every year business owners need to ask themselves, not because Covid-19 just asks.
Each year, stores should try to reduce the size of our business premises – cutting space we don’t use or space that doesn’t make money, for example. Or can optimize the performance of the area, if this year 1m2 of shops generate 200 USD, then next year it must be 250 USD. The franchise mindset is that we must increasingly optimize the space / staffing of a store day by day!
Diversifying revenue with the mindset of “ability to pick up”. Currently, franchises in Vietnam usually have 1, 2 or 3 revenue channels. But with the franchise model, the more revenue channels possible, there is no ‘I have 5 channels of sales enough’.
“The question now is: if I add 1 to 2 revenue channels to the current model, what should I do? If we don’t diversify our revenue channels, we will die easily.
In my opinion, a store that has 1 or 2, 3 or 4 to 5 revenue channels is nothing. Absolutely not much! I always ask my teams to ‘more + 1’, always thinking how to have new revenue streams. If we are satisfied with the current number of revenue channels, we are not evolving, are not growing sustainably over time.“, Ms. Nguyen Phi Van specifically stated.
So, if in the coming time, if The Coffee House, Trung Nguyen or Lotteria, KFC does bring small shelves for sale, we will not need to be surprised. However, except for the brands that choose this kiosk model as their main strategy such as Ong Bau, the remaining luxury F&B chains, even if they go to the street, are also value added, not expandable to compete with other brands. Genuine street food stalls.