Hai Huong, 66, owns a small grocery store in an alley off Huynh Dinh Hai Street in HCM City’s Binh Thanh District. The shop has helped her run her family for the last 20-odd years.  

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But now she plans to close it following a terminal slump and bad losses in recent times.

“Business has dropped day after day,” she said.

Most of her once-regular customers have switched to convenience stores or mini supermarkets, which are mushrooming in that area.

But she admitted their choice was easy to understand because the modern retail stores have a huge range of products, a majority of them of high quality, and routinely offer promotions.

“I cannot compete with them,” she said.

Thousands of these so-called mom and pop shops in cities and towns around the country face a similar fate as modern retail shops spring up everywhere.

According to a recent survey by the Vietnam High Quality Goods Association, traditional grocery shops’ share of business has gone down from 17 per cent in 2011 to 9 per cent now.

From just two supermarkets in HCM City in the late 1990s growth has been dizzying and now there are thousands of modern stores of all types around the country. By 2015 there were round 2,000 convenience stores and mini supermarkets. 

Vinmart+ for instance entered the retail business only three years ago but has already become the biggest convenience store chain in the country with 1,000 outlets.

According to IDG research Vietnam’s convenience store market is expected to grow at 37.4 per cent annually, the highest rate in Asia.

A recent report by Kantar Worldpanel said the modern retail channel is growing at 15 per cent, a much higher rate than traditional channels like wet markets and grocery shops.

Experts said the reasons for the strong growth of the modern retail sector can in fact be linked to the limitations of pop and mom stores.

Most of the latter are small, measuring under 20 square metres on average, meaning the area for displaying goods is limited, a major factor in shopping.

Many of the products sold at these traditional stores do not have clear information with regard to product origin, expiry date, quality and usage instructions.

Vietnam’s strong economic growth, a rapidly growing middle class with higher disposable incomes, frenetic urbanisation and increasing concern about hygiene and food safety are major factors fuelling the rapid growth of modern retail.

The country also has a growing number of sophisticated consumers, especially young urban consumers, and middle-class shoppers who have little time to shop daily for food.

It also has a large number of women in the workforce with rising disposable incomes, who buy higher value consumer items for their children and families.

Products sold at modern retail stores are perceived as safer than those sold in wet markets and traditional grocery shops.

Food safety and hygiene have an increasingly important influence over consumers’ food purchasing decisions. As a result, many are willing to pay a premium for perceived quality, nutrition and hygiene in their food and drinks.

The US’s A.T. Kearney says 24-hour convenience stores and mini supermarkets are now the most favoured shopping outlets among Vietnamese consumers.

There is a dizzying range of chains now -- Circle K, B’s mart, Family Mart, MiniStop, Shop&Go and 7-Eleven owned by foreigners and CoopFood, Co.op Smile, SatraFoods, Vinmart+, Hapro and Vissan owned by Vietnamese companies -- with all of them having a presence all over the nation.

The rapid development of the modern retail channel is also thanks to Government policies, which are always favourable to it.

For instance, according to the Ministry of Industry and Trade’s Circular No.08/2013, in case of setting up a retail establishment of  foreign retailers with area of less than 500 square meters in area planned for goods trading activities by central-affiliated cities and provinces and already finished construction of infrastructure, it is not required to perform provision on checking the economic demand. 

VNS