Vietnam’s retail sector forecast to maintain growth

HANOI: The country’s retail sector is expected to maintain growth in the remaining months of 2023, because most retail businesses have appropriate solutions to increase sales.

According to Tran Duy Dong, head of the Domestic Market Department under the Industry and Trade Ministry, the main goal set for this year is to promote the strong development of the domestic market, striving to increase the total retail sales of consumer goods and services to 8%-9%.

According to retailers, Vietnam’s economy is forecast to maintain growth this year, but it still faces many difficulties. Competition in the retail market is predicted to be more intense with the entry of new retailers and expansion by existing domestic and international competitors.

A recent survey by the consultancy PwC Vietnam has shows Vietnamese consumers intend to be more cautious in their spending habits from now until the end of the year.

About 62% of Vietnamese consumers surveyed say they expect to cut non-essential spending. While 54% of Vietnamese respondents say they will spend less on luxury items, followed by travel (42%) and consumer electronics (38%) because of rising prices.

To counter this, retail businesses in Vietnam have been introducing new ways to maintain or increase their sales numbers. One of the more prominent solutions has been to cut costs in the supply chain, thereby reducing the prices of the goods.

Representatives of some supermarkets in Hanoi say that consumers no longer go shopping as many times as before and they are more interested in just essential items, discounts and promotions. This has pushed supermarkets to offer big discounts to ensure stability in their sales revenue.

The WinMart chain has implemented promotion programmes twice a month with discounts of up to 50% on many goods, and also has a non-profit booth for farmers to sell their products direct to consumers.

Vu Vinh Phu, an expert in the retail market, told the publication Nha Bao & Cong Luan (Journalists & Public Opinion) that the prices of some goods had increased in the past few months, especially essential items such as sugar, cooking oil, instant noodles, and eggs.

Phú said that if the price increase at present could not be controlled or worsens, it would certainly inhibit domestic purchasing power.

While Vietnam has an abundance of domestically produced goods, especially agricultural and food products for domestic consumption and even export, rising prices will cause difficulties for the domestic market, according to Phu.

Phu suggested the state should more closely monitor commodity prices when there are sudden spikes that cause market instability, while also better supervising of goods under government price controls. — Viet Nam News/ANN