The retail sector in Ho Chi Minh City and several parts of Vietnam is grappling with sluggish consumer spending after the Lunar New Year (Tet) holiday, as many households tighten budgets due to lower incomes and high prices of essential goods.

With 2025 expected to be another challenging year, supermarkets are ramping up early-year promotions, while businesses are adjusting production methods, seeking new directions, or even downsizing to stay afloat.

Traditional markets see record low sales

At Ba Chieu Market in the city’s Binh Thanh District, foot traffic was noticeably low at noon on Saturday last week.

Many stalls remained closed, with some bearing ‘For Rent’ or ‘For Sale’ signs, while others were stacked with dust-covered goods. 

Even prime locations near the main entrance, once bustling with customers, were now deserted. 

The second-floor staircase had been converted into a makeshift motorbike parking lot, and stall owners, particularly those in the fashion business, were seen idly chatting or dozing off due to the severe drop in foot traffic.

Nguyen Thi Tuyet, a vendor who has sold travel bags and suitcases at Ba Chieu Market for over 40 years, lamented the sharp decline in sales.

"January used to be our busiest month, with overseas Vietnamese coming home and tourists buying bags for travel. But this year, sales have been terrible. Some days, I don’t even make a single sale," she said, pointing at the market’s empty front stalls, once bustling with gold shops.

Food vendors have also been impacted by the downturn.

Nguyen Thi Huong, a pork seller at Tan Dinh Market in District 1, said that since the reopening on the fifth day of the first lunar month, her sales have been only 30 percent of a regular day and 50-60 percent of last year’s post-Tet period. 

"I expected a slow post-Tet market, but I didn’t think it would be this bad," she admitted.

Supermarkets, shopping malls also affected

The slow market activity was mirrored in major supermarkets and shopping malls. 

Later on the same day, major electronics retailers like Dien May Xanh and Nguyen Kim in Binh Thanh District saw virtually no customers browsing their stores. 

Even supermarkets selling daily essentials, including Bach Hoa Xanh, Kingfoodmart, and LotteMart, reported a significant drop in foot traffic compared to previous years.

"We anticipated a post-Tet sales dip, but this year’s drop is significant," a supermarket representative noted.

Declining consumer purchasing power

Nguyen Minh, owner of local floral brand Happy Flower, noted that despite introducing trendy bouquets like the ‘Baby Three’ collection for Valentine’s Day, sales still fell. 

"Before, customers readily spent from VND750,000 [US$30] to VND1 million [$40] on bouquets," Minh said.

“This year, they’re opting for cheaper ones at around VND500,000-750,000 [$20-30].

“Lower demand and fierce competition are cutting into the revenue."

Even the agricultural sector is not immune.

With his farm spanning 30 hectares, vegetable supplier Bui Trung Kien of Xuan Thai Thinh Company in the Central Highlands province of Lam Dong said Tet-season vegetable sales plunged 40-50 percent compared to previous years. 

After Tet, orders have remained sluggish despite price cuts of up to 30 percent.

A representative from Dong Xanh Farm Co. Ltd. in Lam Dong echoed this sentiment, saying, “Even though we kept prices low, our Tet vegetable sales were only half of last year’s. 

“Farmers, retailers, and producers are all struggling due to the unexpected drop in consumer spending."

The fall in consumer spending was attributed to job losses and wage reductions, forcing families to cut back on even daily necessities. 

"All four working adults in my family have faced pay cuts, and one might even lose their job soon. We’ve had to cut back on everything, from grocery shopping to entertainment expenses," said Tran Thi Thu Hieu, a resident of District 3.

Businesses adapt to survive

Facing prolonged economic uncertainty, businesses are adopting various survival strategies, from discount campaigns to downsizing operations or shifting focus to new markets.

Truong Chi Thien, general director of food producer Vinh Thanh Dat Company, based in Ho Chi Minh City, said that despite running continuous promotions, Tet sales dropped 10-15 percent from the previous year.

"We’re extending discounts until the end of February, but demand is still weak, down about 20 percent year on year," Thien said.

To cope with a likely tough 2025, Thien’s company is considering lowering egg prices under the city’s price stabilization program. 

"Keeping prices affordable is the only way to stimulate demand," he explained.

Specialty retailers like Happy Flower are rethinking their business models. 

Happy Flower has downsized operations, relocating to a smaller, lower-rent location and reducing staff by 50 percent.

"I’m exploring other ventures, like opening a vegetarian restaurant, to diversify revenue. I can’t rely solely on the flower business anymore," said Minh from Happy Flower.

Meanwhile, Kien from Xuan Thai Thinh Company is shifting focus. 

"We’re cutting back on mass-produced crops like cabbage and lettuce, which are widely grown, and instead concentrating on niche products with less competition," Kien said.

Retail chains are also doubling down on promotions. 

Vo Tran Ngoc, head of sales at Vietnam’s leading retailer Saigon Co.op, said his company is offering 30-50 percent discounts on various items for 30 days post-Tet while maintaining stable prices on essentials. 

"Tet sales were stable, but with economic challenges, people have less money. More frequent discounts will be key to boosting demand," Ngoc said.

Likewise, supermarket chain MM Mega Market is rolling out post-Tet promotions, including discounts on essential goods and voucher giveaways, hoping to lure back cautious shoppers.

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