USDA - Vietnam Retail

Vietnam’s modern retail food sector continues to evolve in 2019

Vietnam’s modern retail foods sector has grown steadily over the past three years and continues to evolve in 2019. Strong economic growth, increasing foreign investment, benefits from free trade agreements (FTAs), a growing middle class with higher disposable income, rapid urbanization, and heightened concerns about hygiene and food safety are major factors fueling the sustainable growth in the sector.

Retail sale prices, excluding sales taxes, for modern grocery retailers increased from $22.1 billion in 2013 to $35.6 billion in 2018. Existing modern retail food chains are continuously enlarging their market share by expanding their distribution networks, not only in first-tier cities like Hanoi and Ho Chi Minh City, but also in second-tier cities and provinces across the country. In addition, new players continue to invest in the retail food sector in Vietnam to take advantage of this potential.

The number of modern grocery outlets jumped from around 1,000 in 2013 to nearly 4,000 in 2018. Many modern retail chains have both hyper/supermarkets and convenience stores under one brand umbrella. However, this growth has also lead to increased competition that has already resulted in numerous chains abandoning the market after sustaining heavy losses.

Vietnam's modern retail sector saw significant disruption in 2019 when two leading modern retailers, Auchan and Shop&Go, terminated their operations in Vietnam and were sold to two local companies, Saigon Co-op and Vincommerce, respectively.

Traditional grocery retailers still dominate Vietnam’s retail food sector, while modern retail chains are competing to expand in response to growing consumer demand. Overall economic growth, combined with a sizeable young population, rapid urbanization, and consumer concerns about hygiene and food safety are driving changes in consumption patterns. According to the General Statistics Office (GSO) of Vietnam, Vietnam’s total retail goods and services revenue in 2018 was approximately $191 billion, up 11.7 percent over 2017.

Click here for the full report.

Publication date:

Receive the daily newsletter in your email for free | Click here

Other news in this sector:

© 2020

Sign up for our daily Newsletter and stay up to date with all the latest news!

Subscribe I am already a subscriber