Hong Kong retail sales by value tumbled again in January, entering a 12-month losing streak after a Lunar New Year holiday interrupted by the coronavirus outbreak and amid months of anti-government protests stemming from the extradition bill incident.

Retail sales by value fell 21.4 percent in January from a year earlier, extending a run of declines that started in February, the longest downward trajectory in three years. Retail sales volume also dropped 23 percent.

Retail sales by value fell 21.4 percent in January from a year earlier, extending a run of declines that started in February, the longest downward trajectory in three years

Hong Kong’s retailers and shopping malls had been battered by months of unrest before the virus outbreak escalated ahead of the Lunar New Year holiday.

A government spokesman said that retail sales continued to fall sharply in January 2020 despite the boost from Lunar New Year, which fell in late January this year but early February last year.

The spokesman said that with inbound tourism almost at a standstill and the COVID-19 scare, consumption-related activities had been severely disrupted.

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Preliminary visitor arrivals data for February showed average daily traffic to the city plummeted to fewer than 3,000 people, according to the Hong Kong Tourism Board. That’s an almost 99 percent decline from the year-ago period, data compiled by Bloomberg show.

The business environment for retail trade has turned even more austere in the recent weeks, the Hong Kong government said in a statement Monday.

Before the current turmoil, the longest losing streak for Hong Kong’s retail sector was a two-year stretch that started in March 2015 and ended in February 2017. 

Boldest budget

Last week, Chief Executive Carrie Lam’s administration rolled out the boldest budget in recent years, giving a payment of HK$10,000 (US$1,286) to each permanent resident of the city 18 or older in an attempt to stabilize the economy.

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Months of unrest pushed Hong Kong last year into its first annual recession in a decade, with economists forecasting a second annual contraction in 2020 as disruptions from the coronavirus outbreak further depress output.

The double whammy of the protests and the virus has led to a wave of retail closures and layoffs, and is spurring soul-searching about Hong Kong’s reliance on tourists from the Chinese mainland to power its retail sector.

“Hong Kong really needs to think about how else we can continue to evolve beyond just catering to one particular segment of customers coming to Hong Kong,” said Simon Tye, executive director of consultancy Consumer Search Group in an interview last week before the release of retail sales data. “There’s a need to refocus on our domestic customers as well.”