Retail sales surge as major chains post strong profit growth

Vietnam's retail sector posted stronger-than-expected growth in Q1/2026, supported by government stimulus measures, improving disposable incomes, and a continued shift toward modern retail channels.

The sector entered 2026 on a positive note as domestic consumption continued to recover strongly. Total retail sales of goods and consumer services revenue reached nearly VND1,900 trillion ($72.15 billion) in Q1, up 10.9% from a year earlier, marking one of the strongest growth rates in the past seven years, according to official data.

Growth was driven by a series of consumer-support measures, including the extension of the 8% value-added tax (VAT) rate, adjustments to personal income tax policies aimed at boosting disposable income, and reforms to tax administration for household businesses.

Retailers also benefited from a shift in market share toward organized retail chains as authorities tightened requirements for business transparency and regulatory compliance.

Multiple segments record robust growth

Technology and consumer electronics retailers reported strong Q1 results, supported by a device replacement cycle, demand for computer upgrades ahead of Microsoft's Windows 11 transition, and growing adoption of AI-enabled products.

The ICT segment of Dien May Xanh, a retailer of electric and electronic home appliances, reached over VND32.6 trillion ($1.24 billion) in revenue, a 34% increase compared to the same period last year, while after-tax profit increased by nearly 50%.

FPT Shop reported a 31% increase in revenue and returned to profitability after posting losses a year earlier. Digital products distributor Digiworld recorded revenue of VND8.5 trillion ($322.83 million), up 54% from a year earlier, while net profit surged nearly 90%.

In the pharmaceutical retail segment, major chains continued expanding their store networks. Long Chau increased its pharmacy count to more than 2,500 outlets after opening 100 new stores during the quarter. Pharmacity and An Khang also expanded their footprints, ending the quarter with 1,100 and 409 pharmacies, respectively.

Supported by network expansion and operational improvements, Long Chau generated revenue of more than VND10.3 trillion ($391.12 million), up 28% year-on-year, while EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 55%. An Khang also improved operating efficiency and narrowed losses compared with the previous year.

Food retail chains, after years of investment and expansion, are also beginning to see stronger returns.

Bach Hoa Xanh reported Q1 revenue of VND13.1 trillion ($497.44 million), up 19% from a year earlier. The chain opened 280 new stores nationwide and posted profit of more than VND383 billion ($14.54 million), a sharp improvement from the same period last year.

WinCommerce recorded revenue of more than VND11.3 trillion ($429 million), up nearly 30%, while net profit jumped 3.5-fold to VND204 billion ($7.75 million). The gradual shift of consumers from traditional wet markets to modern retail formats continues to create significant growth opportunities for organized retailers.

Jewelry retail was another bright spot.

High gold prices in Vietnam encouraged consumers to switch to jewelry products with lower gold content. While gold demand by volume remained broadly unchanged, the value of gold consumption reached a record $472 million.

Jewelry retailer PNJ was among the biggest beneficiaries of the trend. Q1 revenue rose 79% year-on-year to more than VND17.2 trillion ($653.12 million), while net profit climbed over 116% to nearly VND1.47 trillion ($55.82 million), setting a new record high for the company.

Outlook remains positive despite inflation risks

Looking ahead to Q2, analysts at ABS Securities said the retail sector's outlook remains positive, supported by ongoing consumer stimulus measures, accelerating public investment, and planned increases in wages and pensions that are expected to boost household incomes.

Seasonal factors, including demand for cooling appliances during the summer and consumer spending related to the 2026 FIFA World Cup, are also expected to support electronics retailers.

However, ABS warned that inflationary pressures are building as energy prices and logistics costs rise. Higher interest rates could weigh on consumer spending, particularly for discretionary goods.

Despite these challenges, Q1 results suggest Vietnam's retail sector is entering a new growth cycle, with advantages increasingly favoring companies that operate modern distribution networks, maintain strong operational efficiency, and have the capacity to expand market share nationwide.