HO CHI MINH CITY: The next three years will see a 40% expansion in the number of supermarkets in Vietnam, thanks to a combination of economic recovery, urbanisation and growing foreign investment.

The modern retail sector currently accounts for between 20% and 25% of consumer spending according to figures from the Vietnam Retailers Association, but this is well below the level seen in neighbouring countries: say, 46% in Thailand, 53% in Malaysia and 64% in China.

The Financial Times noted a recent flurry of activity in modern Vietnamese retail with regional players entering the market or expanding their presence through takeovers or store openings, while local businesses have also been stepping up their activities.

"Existing foreign-invested retailers still account for barely 5% of nationwide retail, but they are the fastest-growing," it said.

Among these are Berli Jucker and Big C from Thailand, Aeon Mall, Family Mart and Ministop from Japan and Lotte Mart from South Korea.

Local conglomerate Vingroup, meanwhile, is planning to open 100 supermarkets and 1,000 convenience stores over the next three to four years.

The Financial Times estimated that, in total, up to 300 new supermarkets could open in that time, "a 40% increase in the existing stock", while the number of convenience stores could treble to 1,500.

And it observed there was huge potential for further expansion, as Thailand, for example, has more than 10,000 convenience stores serving a population that is only three quarters the size of Vietnam's.

The Central Institute of Economic Management (CIEM), meanwhile, forecast that GDP growth would pick up from the 6.03% seen in Q1 2015 to 6.18% in Q2, close to the target rate of 6.2%.

But retailers were more gloomy, as many said that demand was slower than expected during the recent holiday week. VietnamNet reported widespread sales promotion campaigns as they sought to attract shoppers, with the country's leading hypermarket chain Co-op Mart, for example, offering price discounts of 50% on 4,000 essential goods.

Data sourced from Financial Times, VietnamNet; additional content by Warc staff