Big sales promotion campaigns cannot lure consumers to supermarkets

As consumers tighten their belt, supermarkets and shopping malls all have been poorly patronized. Meanwhile, producers still dare not purchase materials to prepare for the year-end production season, even though the peak sale season is nearing.

High grade shopping malls in Hanoi such as Vincom, Parkson, Trang Tien Plaza or Hanoi Tower have all been quiet with very few visitors.

“I have never witnessed such a bad business performance before,” said Nguyen Lan Anh, a saleswoman at Parkson, who has been working there for the last three years. “Despite big sales promotion campaigns, there are still very few buyers. The number of visitors seems to be higher on weekends, but they just ask about the prices and then leave.”

Anh complained that the slow sales have made her income decrease. In principle, besides the fixed salary of 2 million dong a month, she can also get extra money, which is the commission equal to one percent of the sales. Anh now just can earn 400-500,000 dong a month in commission, much lower than the previous average of 2-3 million dong.

The fashion shops on Hang Bong Street in Hanoi, in an effort to lure more buyers, have replaced mannequins with live models. However, this proves to be not an effective solution. “A lot of people have dropped into the shop, especially men. But they just come to watch the models, while they do not make purchases,” said Nguyen Ngoc Thuy, a model for a shop on the street.

Hai Anh, the owner of the café on Trieu Viet Vuong Street said on Gia dinh & Xa hoi, that his shop has never fallen into such a bad situation in the last 20 years. “Due to the price storm, people now only spend money on essential goods, while they have cut down the spending on entertainment,” he said.

In HCM City, both luxurious and popular shops complain about the slow sales. Runway fashion kiosk at Vincom shopping mall in district 1 has 10 salesmen, while the number of visitors at the kiosk is always lower than the number of salesmen at the same time.

Nguyen Van Quyet, the manager of Runway, said that there are only some 20 visitors a day, but they just drop into the kiosk to make window shopping. “We are considering laying off some salesmen to cut down expenses,” he said.

Ly Duong, the owner of a children’s fashion brand, who has a kiosk at Parkson Shopping Mall, complained that he has to pay 70 million dong a month for the retail premises, while he can sell three sets of children’s clothes a day.

The representative of Tax trade center has reported the sharp fall of 30 percent in the number of visitors. A lot of merchants at the center have asked for renegotiating the retail premises rents.

Nguyen Thi Hai, Director of the Hanoi Supermarket, said that she has been doing everything she can to attract more buyers. Especially, a lot of attractive sales promotion campaigns have been launched. “Though we accept lower profits, we still cannot attract buyers. Meanwhile, everything is getting more and more expensive, from the electricity bill, to the salaries for the staff,” she complained.

Meanwhile, Saigon Tiep Thi has reported that businesses still take no actions to prepare for the year-end production season. September is the right time for them to buy materials for the new production season. However, producers have not made any purchases so far.

“We have not ordered materials to make products for Tet sale season because of the weak demand. We even have to slow down the production to clear up our big stocks,” said Nguyen Huu Toan, Director of Sanding, a fashion company.

Toan said that the purchasing power has decreased by up to 40 percent, while he cannot see any signs of improvement in the coming months. Meanwhile, the materials he purchased before still have been left unsold. Therefore, he still has not thought of importing more materials.

Sweets producers also say they have to think carefully before paying deposits for purchasing materials, even though sweets products usually see the demand increasing by 5-10 times than ordinary days. Phan Van Thien, Deputy General Director of Bibica, said that the company has just signed the contracts on fixing prices with the material suppliers, while he will still need to think more about the volume of materials to store.

Tags: Vietnam retail, vietnam retail industry, Vietnam retail market, Vietnam super markets