One of the driving forces of economic growth is to stimulate domestic consumption. Photo: H.Diu

Businesses must suffer losses

According to the criteria of the price stabilization program, the selling price of products in the program is at least 5-10% lower than the market price of products of the same type and quality. In the case of the price of raw materials and input costs increasing by 5% or more, enterprises may register to adjust the selling price to stabilize the market with the Department of Finance.

Recently, at the request of a number of food businesses, the Department of Finance of Ho Chi Minh City issued a document to increase the price of poultry eggs of enterprises participating in the market stabilization program in Ho Chi Minh City in 2022 and the Lunar New Year 2023. Poultry eggs are adjusted to increase from 5.71 to 6.78% compared to the previous level.

However, the inflation "storm" is still hurting the market and consumer psychology. According to the General Statistics Office, the price of food, foodstuffs, the escalation in the prices of essential consumer goods and services in line with input material increase are the main reasons for the 0.38% up of consumer price index (CPI) in May 2022 over the previous month. Notably, food prices in May 2022 increased by 0.22% compared to the previous month, mainly due to increased prices of animal feed and transportation costs.

Therefore, in spite of stable price adjustments, the problem of price stabilization is still very "difficult" for many retail businesses.

Mr. Truong Chi Thien, General Director of Vinh Thanh Dat Food Company, said that the stable egg price registered by businesses is about 12-15% different from the market price. He also added that, currently, 80-90% of the enterprise's egg production is sold in the supermarket system and market stabilization stores.

With daily sales volume increased by at least 50% compared to the number registered in the program, businesses are suffering losses because input prices increased by about 40% compared to June 2021.

Looking for a reasonable solution

Talking about price stabilization in the current market, Mr. Nguyen Anh Duc, General Director of Saigon Co.op, said that fluctuations in the international and domestic markets make price stabilization more challenging, forcing businesses to change their ways. Current price stabilization does not simply price control, but also requires the gathering of many different industries, including services, consumption and tourism. Currently, Co.op Mart has prepared an increase of 2.5 times compared to the same period last year and an increase of 50-100% compared to the beginning of 2022 to ensure a stable source of goods and avoid price fluctuations.

Therefore, retail businesses are struggling to keep prices stable and avoid large price fluctuations. A representative of Ba Huan Co., Ltd. said that the company had to build transshipment points, open stores near the distribution system to meet consumer demand and save costs amid the escalation of gasoline prices. Similarly, Mr. Khuc Tien Ha, Operation Director of VinMart in the North, said that in the context of commodity price fluctuations due to the influence of high gasoline prices, the business has actively negotiated with partners to restrain price, especially for necessities

On the other hand, despite many difficulties, some retail enterprises still continuously expand to attract more customers and increase consumption, compensating for the price stabilization. For example, Aeon Vietnam has opened a number of new retail supermarkets in the form of department stores and lean supermarkets. As explained by this company, these lean supermarkets are characterized by being conveniently located like shopping centers or residential areas, so they meet the needs of "near and convenient" of the majority of urban residents. Meanwhile, the BRGMart distribution system of Hanoi Trade Corporation - JSC (Hapro) has developed in a chain model with nearly 30 BRGMart supermarkets, 40 Haprofood&BRGMart mini stores at convenient trade locations in order to supply essential goods and stabilize prices with prestige.

In addition, some businesses are focusing more on packaging and rearranging products to suit online sales. According to a recent survey by market research company Nielsen, the majority of consumers are changing their shopping behavior due to concerns about prices, in which they will focus more on online shopping and home delivery. Businesses must grasp this trend to not only stabilize prices, but also target the needs of consumers.

According to economic experts, one of the driving forces of economic growth is stimulating domestic consumption. In other word, the more people spend, the faster businesses restore production. However, with the current fluctuations in prices, management agencies as well as businesses need to have appropriate behavior, both to avoid shocks to the market but still ensure businesses production, as well as worker’s spirit.