"The reality shows that in times when the general economy is going through a downturn, people reduce spending. Hence, high-class shopping centres with costly products will not be top choice.”
Ta Thi Phuong, a salesgirl at Hikosen Cara shop in the Parkson Landmark 72, told VIR that her shop was busier than normal with the week of children, which fell on June 1, bringing in more shoppers.
However, normally very few customers drop by her shop as Vietnam’s economic woes have seen consumers tighten their belts.
Though Parkson Landmark 72 Keangnam is in a favourable position in the new business district along Pham Hung road, with plenty of half price discount signs, shoppers have yet to bite.
Not only clothes shops, but scores of beauty product, jewellery and toy shops such as America’s Oshkosh shop are in dire straits.
Compared with Parkson Landmark 72, Savico Mega Mall attracts more visitors. However, huge promotional programmes have had to be rolled out. A seller at Catrio shop said : “This shopping centre only has a great number of customers on weekends. My shop has opened for five months, but our business has been lacklustre. Products only sell well thanks to mostly huge promotional programmes.”
In another supermarket built into the modern Hang Da Galleria shopping centre, the situation is worst.
By last week, only half of the 500 owners were still keeping their shops opened, with many up for sell or leasing.
A seller at a greengrocer’s shop said that purchasers chose to buy fruit and vegetables at open markets rather than in modern trading centres because they do not want to park their vehicles.
A fishmonger said: “My shop is going through a slump. Last week, my family had to eat fish all week”.
The situation is worse in Grand Plaza Department Store, which was considered a high-class shopping centre in Tran Duy Hung street.
Lare Boss shop manager Dinh Dieu Linh said that her shop received very few customers. “In the first five months of 2012, its business goes through a slump,” she said sadly.
Although Grand Plaza has held some entertainment programmes, events to lure visitors such as the Grand Charming show in recent times, it is still unable to attract buyers.
Consumption trend tightened
The low number of customers in modern trading centres is mostly caused by budget conscious customers, impacted by the economic downturn and high inflation during the last months.
Nguyen Hai Yen, an oil and gas sector worker on a healthy salary, even pointed to costly products.
Yen said in general, products at modern retail centres in Hanoi such as the Garden Mall, Pico Mall and Parkson Landmark 72 were more expensive than in supermarkets or street shops.
“I could easily spend one month’s salary during one visit to these centres,” Yen said.
According to latest report released by Nielsen, due to tightening trend, saving spare cash becomes top choice among Vietnamese consumers.
Real figures from trading centres
Savico Mega Mall marketing director Pham Thuy Ha admitted her centre was large with more than 60,000sqm. “Hence, we need more time to lure visitors. Soon, investors will intensify more promotional programs to lure visitors,” said Ha.
According to the latest report of CBRE, even in 2012’s first quarter, shopping centre rents in Hanoi market softened slightly to 33.6 per square metres per month in central business districts (CBD) a trend of movement still existed.
In the first quarter of 2012, 130 shops moved mostly out the Garden Mall, Grand Plaza and Pico Mall. Around 66 units opened, 43 units closed and 18 units are under fitting-out or refurbishment.
CBRE said that overall retail situation remained difficult. On the other hand, malls were only busy when events took place. Food and beverage, cinema and playgrounds performed rather well while jewellery and cosmetics were the most challenging sectors.
CBRE executive director Richard Leech said low consumer spending was expected to continue.
“Special events will have little impact on spending. Besides, although large-scale retail formats introduce features such as family entertainment centres, cinema to attract visitors, higher frequently does not necessarily speak for higher shopping turnover,” said Leech.
Meanwhile, Savills Vietnam said high inflation had influenced Vietnamese consumers.
“The reality shows that in times when the general economy is going through a downturn, people reduce spending. Hence, high-class shopping centres with costly products will not be top choice,” said Savills Vietnam’s quarterly report.