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Jul 17, 2018 / 15:53

Vietnam traditional grocery stores remain downbeat over future: Nielsen Vietnam

Traditional grocery retailers also expressed their great concern about the support from consumers, consumer traffic to their stores and competition from other retailers, according to a survey from Nielsen Vietnam.

In urban region, traditional trade accounts for 83% of total sales equivalent to nearly US$10 billion dollars in the fast moving consumer goods sector, confidence level of traditional grocery stores has softened over the last two years, according to Nielsen Vietnam.
 
Retailer confidence index in the first quarter of 2018. Source: Nielsen Vietnam.
Retailer confidence index in the first quarter of 2018. Source: Nielsen Vietnam.
With more than 1.4 million stores in Vietnam, traditional trade is the largest channel both number of stores and by sales contribution to fast moving consumer goods (FMCG) industry, stated Nielsen Vietnam's latest survey Retailer Sentiment. 

Nevertheless, the confidence level of traditional grocery stores in the retail industry and their own state of business across Vietnam has been softened over the last two years, especially in urban region.

According to the report, Vietnam's Retail Confidence Index (RCI) slightly decreased to 68 points, compared to 69 points in the first quarter of 2017. Traditional grocery retailers also expressed their great concern about the support from consumers, consumer traffic to their stores and competition from other retailers.

​The average RCI is 100, if the index is over 100, retailers are optimistic. If it is less than 100, retailers are pessimistic about their state of business. With well below 100 RCI, traditional trade retailers are not so confident about market potential and would require more support to improve the offtake at stores, explained Nguyen Anh Dung, head of Nielsen's Retail Measurement Services in Vietnam.

Meanwhile, the Consumer Confidence Index kept increasing and reached an all-time high in the first quarter. 

"The optimism that consumers had towards their state of finance did not lead to increased consumption at traditional grocery stores and for FMCG. Their spending go to bigger ticket items, where we saw higher growth in tourism, automotive, cellphone, home appliances, etc.," Dung added.

There are currently some 1,765 convenience stores in Vietnam, over 10 times higher than the number of 147 stores in 2012.