However, despite this setback, the retail industry was still able to achieve new sales record in 2021, surpassing US$173 billion. 

Retail hardest hit 

Ho Chi Minh City was the hardest hit by the fourth wave of the pandemic, especially in the third quarter of 2021.

Among the most seriously affected industry groups were retail and services because a multitude of shops and traditional markets had to shut down under government regulations to maintain strict social distancing.

According to the socio-economic report issued by the General Statistics Office, total retail sales of consumer goods and services in July 2021 decreased by 8.3 percent over the previous month, and 19.8 percent over the same period in 2020.

In August 2021 this number decreased by 10.5 percent, and 33.7 percent over the same period in 2020. Also, total retail sales and revenue of consumer services decreased by 28.3 percent in 2021, compared to the same period in 2020.

Many surveys conducted in the third quarter of 2021 also showed that retail businesses were seriously affected by the pandemic.

According to a survey by Vietnam Report Joint Stock Company (Vietnam Report), many retailers of durable goods, such as refrigerators and jewelry, said that sales during the fourth wave of the Covid-19 pandemic were only 20 percent or up to 40 percent more than before.

There are currently 71.43 percent enterprises of durable goods that have been seriously affected, and 28.57 percent of enterprises are moderately affected. Some retail enterprises, such as the Phu Nhuan Jewelry Company (PNJ) recorded the highest loss in its history.

Accordingly, in the third quarter of 2021, PNJ had a net loss of nearly VND160 billion because it had to close down almost 80 percent of its stores. Similarly, consumer retail chains of The Gioi Di Dong and Dien May Xanh, also saw reduced revenue by 24 percent in the third quarter of 2021 due to temporary closure of 60 percent to 70 percent of stores.

The strong negative impact of the fourth wave of the pandemic caused many wholesale and retail businesses to leave the market, even when activities gradually began to return back to normal by October 2021.

By the end of November 2021, 33,309 enterprises in wholesale, retail and repair, withdrew from the market, accounting for 31.3 percent of total number of enterprises leaving the market altogether, becoming the largest number of enterprises leaving the market, and setting an unprecedented record for the retail industry.

The difficulties of the third quarter made many people doubt the growth ability of the retail industry in 2021.

Contrary to this, the retail industry still reached record sales of more than US$173 billion, becoming a bright beacon during the ongoing pandemic.

Retailers optimistic

According to the General Statistics Office, the total retail sales of consumer goods and services in the fourth quarter of 2021 reached more than VND1.31 quadrillion, up 28.1 percent compared to the previous quarter and down 2.8 percent over the same period last year. For the whole year of 2021, the total retail sales of consumer goods and services are estimated at VND4.79 quadrillion, down 3.8 percent compared to the previous year, if excluding the price factor, it will decrease by 6.2 percent.

However, if counting the retail segment of goods alone, in 2021 it will reach nearly VND3.95 quadrillion, equivalent to $173.28 billion, up 0.2 percent compared to the retail sales of goods in 2020. Thus, the retail market in 2021 continued to record a new record increase by $1.2 billion compared to 2020.

Mr. Nguyen Hoang Dung, Chairman of Sustainable Development Services and Leader Training Company Limited (SDLT), spoke with Saigon Investment about the difficult situation surrounding the Vietnamese retail market.

Mr. Dung pointed out that retailing of goods is inherent in many areas, and even during the pandemic there are still industries that are showing positive growth such as food, pharmaceuticals or product groups for phones, laptops, and tablets, which all serve the needs of working people and those studying from home.

According to Mr. Dung, the retail market in 2021 only saw a sharp decline in the third quarter, while the first and second quarters still maintained a growth momentum.

Specifically, in the first six months of 2021, the total retail sales of consumer goods and services reached more than VND2.46 quadrillion, an increase of 4.9 percent over the same period last year, if excluding the price factor increase of 3.55 percent.

Retail sales of goods in the first six months of 2021 reached more than VND1.98 quadrillion, accounting for 80.6 percent of the total and up 6.2 percent over the same period in 2020.

By the fourth quarter of 2021, purchasing power gradually recovered, which is the reason why the retail market recorded good sales.

In response to the question of many businesses closing, the unemployment rate increasing, consumers tightening spending after the pandemic, and why the purchasing power in the fourth quarter of 2021 recovered, Mr. Dung said that the number of unemployed workers had increased, and the spending of this group of people was not large.

However, even during the pandemic, there are still many people who increased their income. The middle-class group of Vietnam is increasing, and this group of people has a large consumption expenditure. This is also the group that retailers are targeting for sales currently.

It is a fact that in 2021 a record number of retail businesses left the market, although some analyses show that the majority of these businesses were small-scale. It is forecast that in 2022 the retail industry will continue to record positive growth.

According to the latest survey of Sapo Technology Company of 15,000 retailers who are customers of this enterprise, 46.7 percent of sellers believe that the retail market will recover; 14.5 percent of sellers expect to witness strong growth in 2022; and only 9.4 percent of sellers are pessimistic about the future business situation in 2022.

Source: Sai Gon Giai Phong

Retail to bounce back strongly in 2022

Large retail firms are to gain even more market share this year as smaller competitors have been forced to exit the game after prolonged lockdowns and mobility restrictions during recent years, said industry experts.