Saigon Co.op, a leading grocery retailer in Vietnam, is set to open a chain of small-scale food outlets in Ho Chi Minh City (HCMC). The Co.op Food outlets will be located in densely populated zones and will sell fresh food and vegetables, according to a report in Vietnam Business Finance.

The first Co.opFood outlet is opening in Binh Thanh District and the second will open in District 1 in January.

A further 20 stores are planned for 2009, each measuring 100 to 500 square meters and costing VND2-10 billion (US$600,000-1 million), said chief executive officer Nguyen Thi Hanh.

The new chain is in addition to the company's Co.opMart which is also planning to expand. It currently has 30 outlets in HCMC, Hanoi, Da Nang, Can Tho and Ben Tre. and is on track to open 50 new stores by 2010 and and a further 50 by 2015.

Tran Thi Kim Quyen, the group’s general manager of retail support division, told Retail Asia,  “Although there is an economic slowdown in the region and the world, the [situation in] Vietnam is getting better, with efforts to control the inflation from the government now coming to effect.”

Vietnam was highlighted as the most attractive emerging market for retailers to consider in 2008, according to AT Kearney”s Global Retail Development IndexTM (GRDI). Vietnam, knocked India from the No 1 position it has held for the last three years, due to its relative absence of competition, impressive GDP growth which exceeds eight per cent, and increasing consumer demand.

The strategic management consultancy firm also recognised that although Vietnam remains a communist country its leaders are attempting to replicate the economic success achieved in China. This includes the undertaking of a broad-based privatisation program and the removal of restrictions on 100 per cent foreign ownership by retailers.

As living standards rise more consumers are switching from traditional, open-air wet markets to modern retail although convenience and freshness remain especially important, notes the report.

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