Purchasing power of Tet goods remains weak

Goods stockpiled for Tet holidays at supermarkets increased averagely by 10-20 percent; traders at three wholesale markets in Ho Chi Minh City also stockpiled goods heavily for Tet holidays. However, with abundant supply of goods, many businesses concern as purchasing power remains extremely weak.

Consumers buy gift baskets at a supermarket. (Photo: SGGP)

According to city-based businesses, the amount of goods for Tet holidays has reached 90 percent of their plans. Compared to previous years, preparation of Tet goods this year has seen many more favorable conditions, such as: stable weather, steady input material prices, and especially, petrol prices have declined for five consecutive times since early-December.
However, Nguyen Thanh Nhan, CEO of Saigon Co.op, said that purchasing power posted growth during the occasion of New Year but was not as high as expected. Noticeably, after New Year, the market fell into silence again. According to him, in the past three Tet holidays, purchasing power only highly increased within ten days before Tet instead of within the whole month before Tet.
Experts said that purchasing power only concentrates on a few days before Tet because consumers still tighten consumption due to economic difficulties. In addition, as supermarkets and stores only close for a few days during Tet holidays so consumers do not have to stockpile goods like before.
In the field of Tet gift basket supply, many shops are worrying as they have not received many orders. A grocer in Xo Viet Nghe Tinh Street in Binh Thanh District said that in previous years, her store had 50 percent of orders at this time of the year. However, the number of orders merely reached 20 percent this year though lunar New Year is just around the corner.
Purchasing manager of a supermarket in HCMC shared that his supermarket has not received big orders as firms need time to make plans for giving Tet gifts to their workers. Giving Tet gifts, especially Tet gifts for workers at industrial and processing zones, usually depends on annual business results of firms.
In order to boost purchasing power during year end, many supermarkets have coordinated with manufacturers to run several promotion campaigns to increase sales and reclaim capital. Representative of a large electronics store in HCMC admitted that in order to ensure sales growth, the store thoroughly utilized the lever of coordination with its partners to run promotion campaigns. At the same time, it also changed sales methods and developed installment method.
‘Without association, none of distributors are able to stimulate consumption demand while purchasing power remains as weak as currently. However, distributors should choose partners wisely to avert risks,’ he said.
Promotion campaigns aim to improve purchasing power and increase turnover. However, entrepreneurs only achieve half of their goal which is boosting purchasing power whereas turnover was not as high as expected.
According to calculation of a retailer, despite its effort to run big promotion campaigns, turnover is expected to rise only by 10-15 percent over the previous year. For the upcoming Tet holidays, businesses dare not to dream of a growth of 20 percent as some departments have forecasted. In reality, if excluding elements, such as inflation, turnover is almost unchanged. In this context, many retailers have carried out many marketing activities.
Tet goods supply is extremely abundant and diversified with stable prices this year. However, as purchasing power has not showed signs of improvement, businesses should take full advantage of every opportunity and strengthen investment solutions to keep customers. They also should closely watch movements and purchasing power of Tet market so as to draw appropriate supply plan.

By Thuy Hai – Translated by Thuy Doan

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