A paradox in Vietnam: consumers upbeat, grocers downbeat

By Dat Nguyen July 18, 2018 | 05:22 pm PT

Over half of surveyed grocers said they are not confident in the future of their business. Photo by VnExpress/Giang Huy

Consumers are optimistic, but they are not buying much from traditional grocery stores, a new study finds.

52 percent of 800 traditional grocery stores are not confident that they will do good business in the next 12 months, according to a report by market research firm Nielsen Vietnam.

This is an increase of 8 percent from the first quarter last year, and their confidence level has been dipping over the last two years, according to the Vietnam Retailer Confidence Index Q1 2018 report.

The study found that reduced consumer traffic to the stores and competition from other retailers were the main concerns of the traditional grocery store.

This finding “clashes” with a previous Nielsen study which found Vietnamese consumers are more optimistic about their financial status.

“The optimism that consumers had towards their state of finance did not lead to increasing consumption at traditional grocery stores,” said Nguyen Anh Dung, head of Retail Measurement Services of Nielsen Vietnam.

He said Vietnamese consumers were spending more on bigger ticket items like travel, cars and home appliances.

There are more than 1.4 million stores in Vietnam, and traditional trade in the urban region accounts for 83 percent of total sales, equivalent to nearly $10 billion, it added.