Inflation-weary customers ignore discount sales and other promotions
Clothes on sale are displayed at a garment shop in Hanoi. Inflation has forced many consumers to tighten their belts and reduce spending on non-essential items.
Retailers nationwide have launched many promotions offering huge discounts for several months now, but consumers are not responding as usual.
The latest inflation-influenced belt tightening is more serious than on previous occasions, and some enterprises are even laying off workers as sales plunge.
The BigC Supermarket chain has run its biggest promotional campaign since June, offering discounts of up to 50 percent on more than 4,000 items. Meanwhile, the Vietnam National Garment and Textile Group has reduced retail prices of some 300 products by 10-50 percent.
Small traders have followed suit.
In the capital city, along the shopping streets of Chua Boc, Tay Son, Pham Ngoc Thach and Cau Giay, dozens of stores selling consumer goods such as garments, electronic products and footwear have announced discounts of 20-70 percent.
Nguyen Thi Huyen, a saleswoman at a clothes shop on De La Thanh Street, said: "Our sales have never been as bad as now. We have not sold any garments over the past two days despite the discounts."
Huyen's shop is selling garments for middle-aged people, priced at VND200,000-500,000 (US$9.8-24.4), at 20-50 percent markdowns.
Because business has been stagnant, the shop's owner had to sack two other saleswomen, Huyen said as she brushed the garments.
"Years ago, customers would double whenever we had a sale," said Tran Thu Trang, the owner of a footwear shop on Dinh Cong Street. "But nobody seems interested in buying now, although we've announced discounts of up to 70 percent."
Trang said she wants to sell out all her stock and close the shop, but was finding even that was not easy.
According to a recent survey by global market research firm Nielson, 64 percent of Vietnamese consumers indicated now was not the time to buy the things they want and need, given the high costs of goods and the state of their personal finances.
Eighty-eight percent of the respondents said they have changed their spending patterns over the last year to save on household expenses. Up to 70 percent said they cut spending on new clothes.
Inflation accelerated for the 11th straight month in July as consumer prices rose 22.16 percent from a year earlier, compared with June's 20.82 percent growth, according to the General Statistics Office.
Food, transport and construction material prices have stoked the increase in consumer prices growth.
Economist Le Tham Duong of the Ho Chi Minh City Banking University said it would be difficult to meet the target of keeping inflation at 15-17 percent this year as prices rose in the world market and imports increased in the last months of the year.
In addition, soaring gold prices would push up prices of other products and services, increasing pressures on inflation, he said.
Duong said the government's anti-inflation measures should be carried out more actively and the fight against gold speculation strengthened.
For its part, the government has said it will take drastic measures to meet the target of reducing the budget deficit to below 5 percent of gross domestic product, and continue to tighten its monetary policy.