The convenience store race heating up

More and more convenience stores, which provide modern services like supermarkets and can reach out to every corner in residential quarters like traditional markets, have been set up in the plan of retailers to expand their networks.

In late August 2011, Saigon Co-op put another Co.opFood convenience store in Binh Thanh district into operation, raising the total number of convenience stores of the distribution chain to 22.

Other retailers, after seeing with their eyes the success of Co.opFood convenience store chain, have also jumped on the bandwagon. The Saigon Trade Corporation (Satra) has opened SatraFoods, while the Saigon Food Trade and Services Company has opened Minimart, and Bach Hoa Moi has opened some convenience stores in the New Cho chain. There are also the networks of product introduction stores of Vissan, Sagrifood, Phu An Sinh and CP.

Most of the convenience stores are following the same model of operation. Co.opFood, SatraFoods, Minimart are mostly selling fresh food, which account for 30-40 percent of the total goods on shelves, and some cosmetics, processed food and essential items. The sale mode there seems to be similar to that at traditional markets: fresh food (meat, fish, vegetables, fruits) are displayed for customers’ choice.

At New Cho stores, besides cosmetics and essential goods, there is also fresh food in packs already. The stores of My Duc-Binh Dien Company sell the seafood products sourced from Binh Dien Market, pork from Vissan and some kinds of processed food.

The main customers of the convenience stores are the middle class income earners, who accept to buy goods at the prices higher than that at traditional markets, but want high quality services, ensured quality of products.

The customers do not want to buy food at traditional markets because they are not sure about the food hygiene of the food, but they do not have time to go to supermarkets, where they have to spend time on parking and waiting at check-out counters.

Retailers keep optimistic about convenience store development

Nguyen Trung Thang, Chair of Masso Group, said he can see big opportunities to develop convenience stores. According to AT Kearney, a market survey firm, despite the big difficulties, Vietnam still could maintain the high growth rate of the retail market at 25 percent in 2010, while the retail revenue is expected to reach 88 billion dollars by 2012, especially when Vietnamese consumers tend to approach to modern distribution modality.

Convenience stores have been compared by retailers as their arms which help them reach out to every corner of residential quarters. Saigon Co-op, the owner of Co.opFood, has said it plans to open 150 such stores by 2015. Satra plans to open 10 SatraFoods in 2011, while New Cho is taking hectic preparations to put 2-3 more stores into operation in the time to come.

Tran Thi Tuyet Hoa, Deputy General Director of Saigon Co-op, also keeps optimistic about the development of convenience stores. She said that in other countries, people mostly go to convenience stores during weeks, and they only go to supermarkets once or twice a week. The tendency may also be seen in Vietnam in the near future.

Convenience stores prove to be the good choice for customers, because they offer high quality products at reasonable prices. And they also prove to be the good choice for retailers to develop networks, because it is much easier and less costly to seek retail premises for convenience stores than for supermarkets.

With the small areas (100-300 square meters), convenience stores have been easily penetrating residential quarters, industrial zones and export processing zones. As such, convenience stores have become the redoubtable rivals to traditional markets.

Source: NLD

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