Inflation cuts into retail sales

Vietnam’s retail revenue increased in the first half of the year but not as robustly as in the same period of previous years due to rising inflation, said a source from the country’s retail association.

Vietnam’s General Statistics Office (GSO) has put the first-half retail revenue at VND912 trillion, up 22.6% year-on-year.

Dinh Thi My Loan, general secretary of the Vietnam Retail Association, said at a seminar in HCMC on Tuesday that the retail revenue growth in the first six months was much lower than in the previous years, at nearly 7%, if price hikes were excluded.

“This is a very low growth rate as compared to the 15-20% range in previous years,” Loan said. “If retail growth was only 5%, the situation was really worrying.”

Loan explained retailers were strongly affected by rising inflation which has led to goods, service and transportation prices spiking. GSO said the consumer price index in June surged 13.29% from December last year.

To cope with the situation, some local retailers have cut down on new orders to avoid too much inventory, and launched promotion programs to prop up sales.

The total retail revenue this year could increase over 6%, said Loan.

Earlier this month, Vietnam’s retail market was downgraded in an annual report released by A.T. Kearney. Vietnam fell nine places to 23rd, down from topping the 2008 GRDI list to 6th in 2009 and 14th last year. – SGT

Tags: Vietnam 2011 inflation, Vietnam economic, Vietnam economy, Vietnam inflation