VietNamNet Bridge – In the hard times, when supermarkets have few customers and high income earners keep away from traditional markets for fear about the food quality, convenience stores still “live well” because they can provide products at lower prices and ensure food hygiene.
Retailers believe that injecting money in convenience store is a wise move for now, because it’s easier to seek retail premises, while the investment cost is reasonable. This explains why convenience stores have been penetrating deep into residential quarters, industrial zones and export processing zones, and into traditional markets as well.
Convenience store – the prolonged arm of supermarket
In late April 2012, Saigon Co-op, a well-known retail chain in the south, put into the seventh Co-op Food store, in Vinh Loc Industrial Zone in Binh Chanh district, into operation. This is considered the biggest Co-op Food store in the chain.
Prior to that, Vinatex Mart put into operation its Vinatex NBC store in district 7 which targets the workers at the Nha Be Garment Company and local residents.
A lot of convenience stores of Satrafoods, Ministop and Daiso (Japan) have been established so far this year. The HCM City Youth Union has also joined forces with some partners to open convenience stores. It plans to set up at three stores in every district in the inner city by June 2012, four stores in every suburb district and three stores in every industrial zone and export processing zone.
Retailers said that there are many favorable conditions for the development of convenience stores. Consumers have changed their shopping habits. As they do not have much time to go shopping and they want products with high quality, they tend to go to convenience stores to collect most essential goods for their daily life.
Co-op Food has had 40 convenience stores so far, while it plans to set up 30 more by the end of 2012. Satrafoods also plans to open 20 more stores this year. Vissan is running 80 stores introducing its food products. Meanwhile, Tiep Thi Gia Dinh has opened two TTGD Foods located in high end residential quarters which target modern women.
Not only domestic retailers, but foreign investors have also jumped into the market segment. Japanese Ministop opened its first store in December 2011. FamilyMart has had 16 stores so far, while it plans to raise the number of stores to 27 this year. The US Circle K has announced the plan to open 40 stores this year.
Other retailers die, convenience stores still live well
While other retail channels have been struggling to survive the current difficulties, as the purchasing power dramatically weak, convenience stores stay safe from the economic crisis.
Tran Thi Tuyet Hoa, Deputy General Director of Saigon Co-op, said that the sales of convenience stores remain stable, while the sales of other retail channels have dropped sharply.
Having noted the increasingly high number of customers, Co-op Food has raised the percentages of fresh food to 30-40 percent at the stores in residential quarters, and 20 percent in industrial zones. Housewives tend to go to convenience stores, especially on rainy days, when they do not want to go to supermarkets or traditional markets.
Le Minh Trang, General Director of Satra, said fresh food accounts for up to 70 percent of products available at the chain, mostly serving the daily meals of people.
Even the convenience stores specializing in providing household goods and cosmetics have also been safe from the economic crisis. Nguyen Thuy Trang, Managing Director of Daiso Vietnam, said the sales of Daiso’s stores have been increasing steadily.
“A lot of investors have suggested opening Daiso stores in other provinces, but we still have not thought of this,” Trang said.