Retailers in Ho Chi Minh City are worried about their sales results as many suppliers want to increase prices when demand is at its lowest all year.
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| Many supermarkets have received requests of price increase from food suppliers (Photo by SGTT) |
Currently, prices of locally manufactured or imported cosmetics, clothes and footwear have gone up to 3-5% in retail markets.
Lien, a clothes retail and wholesale supplier in An Dong market, Ho Chi Minh City said, “Imported textile fabric prices have risen in addition to a strong increase in labour costs. Last year I had to pay about VND2.5 million ($126) per person but now I have to pay VND3.5 million ($177) per person. Thus, our selling prices now cannot be the same as the last year’s, although I know August and September had low demand. Still, I made my decision to increase the selling prices later than many other suppliers.”
Maximark supermarket’s suppliers explained that they wanted to increase their selling prices because of the jump in currency exchange rate between the US dollar and Vietnam dong as well as the growth in imported material prices.
Maximark supermarket in Ho Chi Minh City has received requests from over 100 suppliers that want to raise their prices on nearly 500 consumer products. Accordingly, canned food, candies and cakes will have an increase in price by an average of 5%. Cooking oil, chemical-cosmetic, and home appliance product prices will go up to 3%, 5-8%, 4-5% respectively.
Nguyen Phuong Thao, Director of the Maximark supermarket said, “The suppliers give us reasons for their requests so we cannot refuse. However, we encourage them to offer promotions when they start applying the new price policy in a bid to avoid sales reduction.”
Thao added that the price hikes would begin in early September which is also the promotion month in the whole city. Thus, suppliers will launch both their promotion programmes and new price policy at the same time.
Similarly, Big C supermarket has received requests from imported canned food suppliers that want to increase the price by up to 10%. Citimart supermarket has also been asked to raise prices of imported food and beverages by 5-10%. Suppliers of chemical-cosmetic and plastic products requested Saigon Co-op supermarket to increase prices by to 5-12%.
Nguyen Thanh Nhan, Vice Director of the Saigon Co-op supermarket shared, “Although suppliers have appropriate explanations about their price increases, we cannot let it happen during the months with lowest demand all year.”
According to Nhan, they received requests to increase prices mainly from small scale supplying companies. Big suppliers have not decided to increase their selling prices because they still have reserved goods. Thus, his supermarket will definitely prefer giving orders to suppliers which do not increase their prices.
Saigon Co-op supermarket is planning to discuss with suppliers when they should increase their selling prices and by how much. Nhan added that the best time for price increases was mid-October onwards and the increase rate should not be too high otherwise it will impact purchase power.
Dang Minh Duc, Marketing Manager of Best Carings Retailer said the currency exchange rate between the US dollar and Vietnam dong had risen by 5% since early this year. However, retail prices of imported electrical-electronic and IT products in Vietnam remain the same in order to maintain competitiveness among retailers.
Do Khoa Tan, Director of Viettronics Bien Hoa Joint Stock Company (Belco) shared that the increase in currency exchange rate had impacted not only importers but also domestic manufacturers like Belco.
“It’s not the right time to increase retail prices now. We are forced to cut down many expenses to maintain the current prices. We have bought more locally manufactured components instead of importing them as well as enhanced our productivity,” shared Tan.
