Hong Kong’s struggling retail sales plummeted by a record 44 percent in February year-on-year, battered by the months-long citywide violent protests and the novel coronavirus pandemic.
The SAR government pledged a second round of financial aid worth billions of dollars to help businesses and wage earners weather the storm.
The retail business environment will remain extremely austere in the near term, as the COVID-19 pandemic has brought inbound tourism to a standstill and severely dented local consumption demand
a government spokesman
The plunge to HK$22.7 billion (US$2.93 billion) — from a revised 21.5 percent slide in January — was the worst recorded, dragging the hard-hit retail sector into a 13-month losing streak. Before the social unrest erupted, the longest losing streak was a two-year stretch that started in March 2015 and ended in February 2017.
Although the Lunar New Year holiday — the traditional peak shopping season — fell in the last week of January, the industry got off to a rocky start in the Year of the Rat. In the first two months of 2020, the value of total retail sales was down 31.8 percent, compared with the same period last year.
“The retail business environment will remain extremely austere in the near term, as the COVID-19 pandemic has brought inbound tourism to a standstill and severely dented local consumption demand,” a government spokesman said on Tuesday.
Chief Executive Carrie Lam Cheng Yuet-ngor said on Tuesday the pandemic and a sluggish global economy on the verge of recession has dealt an unprecedented blow to Hong Kong. February’s drop was the steepest on record for the retail business for a single month.
Following a massive HK$30 billion relief package revealed last month, Lam said the government is losing no time in rolling out a second round of financial assistance to ease the woes of businesses and employees.
Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, warned on Tuesday the retail industry is expected to see a 30 to 50 percent tumble in sales in the first half of this year.
February’s slump brought the city’s bruised retail sector back to the 2016 to 2017 levels. As Hong Kong grapples with an alarming surge in imported and local coronavirus infections, with tougher measures rolled out to enforce social distancing, Tse believes there’s no light at the end of the tunnel for retailers in the near future.
As consumer sentiment continues weaken, she said retailers will have to brace for sharp drops in sales in the coming months, worse than what they had suffered last year as the violent protests escalated.
Hong Kong welcomed 199,000 visitors in February — down by more than 96 percent from the previous year — following a 52.7 percent decline in January. Mainland tourist arrivals plummeted nearly 98 percent year-on-year, according to the Hong Kong Tourism Board.
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