How will Vietnam’s retail sales grow by end-year?

In August, the retail sales tumbled as the government generally tightened the restrictions to deal with the widespread transmission in the southern epicenters, including Hochiminh city- country's economic center. According to GSO's estimates, the retail sales in August 2021 continued declining strongly to the 2021-low of VND279.84tn, down 10.50% MoM or 33.70% YoY. This reduction focused on the decrease in retailing activities in southern areas, such as Hochiminh city and Binh Duong province, where Directive No. 16 generally limit ed the community mobility.

The revenue from the retail sector kept worsening this month as just recording a modest amount of VND249.94tn, down 0.73% MoM and 25.35% YoY, respectively. Furthermore, performances of the accommodation and catering (A&C) and traveling businesses reduced further and added more downward pressure on the total retail sales. More specifically, revenues of the A&C and traveling businesses reduced by 66.89% YoY and 97.56% YoY to post VND13.53tn and VND0.02tn this month.

Regarding the structure, the retail value kept overwhelming, with the largest share at 89.13% of the total, while A&C and traveling sectors jointly consisted of 4.84% of total revenue.

In September, the retail sales recorded a modest increase after posting the 2021-low in the previous month when the government eased restrictions for some activities and allowed more traditional markets to re-operate. However, total revenue from all retailing activities remained much lower than pre-outbreak era.

According to GSO's estimates, the retail sales in September 2021 was VND308.80tn, up 4.94% MoM or down 28.38% YoY. Also, the retail sector and accommodation and catering (A&C) revenues rose modestly by 4.49% MoM and 1.07% MoM, posting VND270.80tn and VND19.43tn, respectively. Regarding the structure, the retail value kept overwhelming, with the largest share at 87.69% of the total, while A&C and traveling sectors jointly consisted of 6.32% of total revenue.

Local authorities in COVID-19- hit cities and provinces, especially HCM city, have gradually reopened the economic activities when the vaccination reached the specific requirement level, signaling hope for the retail sales to recover in the next months.

PHS said that the COVID-19 pandemic would cause difficulties and Việt Nam has not yet deployed vaccines for the entire population, which could affect the purchasing power of consumers. Moreover, the income of a part of consumers that was reduced due to the COVID-19 pandemic has not been able to improve in the short term.

“If vaccinations are implemented in the fourth quarter of 2021, the growth rate of the retail sales industry could reach 8 per cent year-on-year”, PHS forecasted.