The domestic retail market will continue experiencing difficulties next year due to volatile business conditions, experts told the “World and Viet Nam: Forecast 2012″ seminar held in the capital over the weekend.
Phan The Rue, chairman of the Viet Nam Retail Association, said at the event, organized by the Viet Nam Chamber of Commerce and Industry, that the world market was predicted to undergo slow growth next year due to economic downturn in the US and Europe as well as social instability in other countries around the world. Emerging economies, including those in Asia, have been faced with high inflation and low economic growth rates compared to 2010.
These factors would affect the domestic economy as well as the retail market next year, Rue said.
In addition, the Government would continue controlling the macro-economy and inflation to boost production and ensure social security, he noted.
To achieve macroeconomic stability, both the scale and growth rate of the local retail market would have to be kept in check, he added.
With the market dependent on macro-economic development, price stability and the relationship between supply and demand would in turn depend on the price of essential, Government controlled products such as electricity, coal, petrol and oil.
The high price of import materials would continue affecting customers while real incomes reduce, Rue said, adding that competition between foreign and local retailers was also expected to remain low next year.
Nguyen Thai Dung, deputy general director of the Big C Supermarket Trading and Service Ltd Company, said that high inflation has eroded purchasing power while saving trends have affected consumption.
Consumption growth, following deducted price factors, was 14 per cent in 2010 and only 4 per cent in 2011, making forecasts for 2012 dismal, he said.