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Retailers struggle to renew leases

Update: March, 09/2012 - 10:49

HA NOI — The Ministry of Industry and Trade (MoIT) has asked the Ministry of Planning and Investment to revise a decree on investment incentives for retailers and distributors to improve the domestic retail system, said Vo Van Quyen, director of MoIT's Domestic Market Department.

Under current regulations, retailers and distributors did not get priority when it came to accessing retail space. Therefore, it was difficult for them to develop sustainably, Quyen said.

Quyen cited the example of the Fivimart supermarket chain. Nhat Nam Co, which owns 13 Fivimart supermarkets, had to close the fourth outlet it opened in HCM City late last month because it lost its rental lease.

Representatives from Nhat Nam Co said that after the company's lease expired, it failed to negotiate a new lease price with the landlords and had to shut down the supermarket.

It has also been difficult for retailers and distributors to directly lease retail space from landlords, meaning they often had to go through intermediaries. Retailers complain that when leases expire it is often difficult to renegotiate contracts, and that prices are usually hiked.

According to MoIT, there were 638 supermarkets and 117 shopping centres in the country by the end of 2011.

MoIT plans to develop the domestic distribution network to make it more professional and modern.

Viet Nam is considered an attractive retail market. The total retail value of goods and services is estimated to be US$100 billion this year.

In the period 2011-20, it is forecast the local retail market will grow by 10 per cent annually, with domestic goods accounting for 20 per cent of the GDP. — VNS

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