Vietnam's retail sector is struggling as sales have fallen to an alarming low, an industry group said, urging the government to take measures to boost consumption.
Retail sales surged 20 percent in the first four months from a year ago, but if inflation is factored in, the rise is less than 5 percent, Dinh Thi My Loan, general secretary of the Vietnam Retailers Association, told a conference in Ho Chi Minh City Friday.
Loan said this rate was too modest, compared to the record low annual increase of 7.6 percent recorded in 2010.
Vietnam's leading supermarket chain Saigon Co.op said its revenues in the first quarter fell 10 percent year-on-year while other retailers also reported difficulties including low sales and higher input costs.
According to the Ministry of Planning and Investment, 17,735 businesses shut down or halted operations in the first four months, up 9.5 percent from the same period last year. More than 5,000 of these companies were wholesalers or retailers, the ministry said.
Vietnam's consumer confidence fell to the lowest level in the first quarter since mid 2010 as most consumers said they will refrain from buying even the products that they need, a Nielsen survey found.
Loan said the government has announced a relief package including tax cuts and deferments, but local companies need more support. Production costs should be cut so that prices can be lowered to encourage consumption, she said.
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