Grocery stores embrace new look, strengthening support for manufacturers

Grocery stores embrace new look, strengthening support for manufacturers

According to data from NielsenIQ Vietnam, traditional trade channels including grocery stores and markets account for 75-83 per cent of total market sales.

An organic food shop in HCM City. Despite modern retail growth, grocery stores remain vital for manufacturers.  Photo sabudo.vn

Despite the growing competition from supermarket chains and e-commerce platforms, traditional grocery stores, especially in HCM City, maintain their position in the retail market, trade experts have said. 

According to data from NielsenIQ Vietnam, traditional trade channels including grocery stores and wet markets account for 75-83 per cent of total market sales. Nearly 1.4 million grocery stores nationwide contribute up to 65 per cent of the fast-moving consumer goods (FMCG) market.

A survey by the Business Association of High Quality Vietnamese Products found that more than 70 per cent of consumers prefer shopping at grocery stores due to their reasonable prices, convenience, and the personal connections they have with sellers.

As modern retail formats continue to expand, traditional trade channels such as grocery stores remain a key distribution network for manufacturers, highlighting their lasting importance in Việt Nam's economy, according to the survey. 

Nguyễn Tuấn Hải, a processed food distributor in HCM City, agreed. He said that the crucial role of grocery stores was to quickly and conveniently deliver goods to consumers.

Shopping at these stores had become an integral part of consumer culture, spanning from urban centres to remote areas, he said.

A fresh new look

With their convenience and close ties to consumers, many grocery stores have proactively evolved, adapting to meet modern retail trends. Some have even partnered with supermarket chains to upgrade their operations, transforming into modern retail outlets to meet changing market demands.

No longer just small, cluttered stalls, many traditional grocery stores have improved both their appearance and services. Store owners now focus on neatly displaying products, with clear pricing and transparent origins.

Thu An, who owns a grocery store near the wet market on Huỳnh Văn Bánh Street in HCM City's Phú Nhuận District, has significantly upgraded her store over the past two years. She now offers a full range of essential consumer goods, from toothbrushes and soap to cooking oil and fish sauce, catering to the daily needs of her customers.

Beyond organising products efficiently, An also prioritises understanding her customers' shopping habits, allowing her to provide a better service.

Despite competition from major retail chains like WinMart, GS25 and Bách Hóa Xanh, her store brings in a stable footfall, thanks to a loyal customer base.

Some customers even delayed payments on beer and drinks for a week or two, a testament to the trust between traditional grocery stores and their patrons, she told thesaigontimes.vn. 

Similarly, in Tân Bình District, Lan Hồng’s grocery store has embraced a modern approach while maintaining its traditional roots. Her store features a well-organised layout, with separate sections for fresh and processed goods, attracting a loyal customer base.

To keep up with consumer preferences, she sources products directly from major suppliers and adapts her inventory based on customer demand.

Hồng said she maintained close relationships with shoppers by proactively checking in, offering complimentary items, and providing home delivery services.

Meanwhile, in District 12, Thanh Hà has navigated nearly two decades of running a grocery store, enduring various challenges, including supply shortages during the COVID-19 pandemic.

To enhance competitiveness, she joined the 'Good Price' project by MM Mega Market, securing a stable supply chain and receiving training in sales and customer service. This initiative has helped her build a strong reputation and attract more customers, reinforcing trust in traditional grocery businesses, Hà told thesaigontimes.vn. 

An organic food shop in HCM City. Despite modern retail growth, grocery stores remain vital for manufacturers.  Photo sabudo.vn

Distribution partners

According to Hải, many businesses are increasingly choosing grocery stores as distribution partners, due to their higher profit margins compared to supermarkets, which impose additional fees and discounts.

Nguyễn Cao Ngọc Dung, a senior manager at NielsenIQ Vietnam, echoed this view. While modern retail channels like supermarket chains enhance brand visibility, grocery stores continue to be a crucial driver of sales for manufacturers.

Recognising the competitive advantage of grocery stores, modern retail brands are increasingly shifting their focus toward this sector.

In addition to MM Mega Market’s 'Good Price' project, which helps investors transform traditional grocery stores into modern retail models, major retailers such as Saigon Co.op and Aeon Vietnam are also developing modern grocery store formats to better meet evolving consumer needs.

Additionally, the VinShop application from One Mount Group enables grocery store owners to order products directly at discounted prices. 

Bizhub