Supermarkets and the poor in Vietnam

The number of supermarkets in Vietnam is increasing due to government incentives, increased urbanisation and growing purchasing power. However, for price and access reasons, street vending remains the dominant retail mode. Poor consumers also often reject shopping at supermarkets because of freshness concerns. For many, supermarkets serve as pure entertainment. However, in Ho Chi Minh City, poor and non-poor have accepted supermarkets as retail outlets for clothing and other non-food products.


A further spread of supermarkets might have negative impacts on consumers such as:

• a possible increase in food prices
• food dependency and unbalanced trade
• a decreasing number and diversity of food retailing outlets
• the promotion of an unbalanced diet
• loss of cultural knowledge about food.
  

The spread of supermarkets also affects poor farmers. Case studies on poor farmers' and traders' participation in distribution value chains for vegetables, flavoured rice, litchi and off-season vegetables show that poor farmers cannot sell their products directly to supermarkets due to safety restrictions and quantity conditions. To cope with a spread of supermarkets, farmers have to join associations and participate in modern value chains and activities such as packaging. This could increase their income, but requires large capital to start with.

Given the advantages and disadvantages of a further spread of supermarkets, the Vietnamese government should continue promoting traffic improvement, hygiene and food safety and traders' employment. It should, however, also provide suitable areas for - properly regulated - temporary markets in every district to avoid excessive concentration in the retail sector.