Hong Kong’s struggling retail sales recorded two straight months of declines greater than 40 percent as fears of catching the coronavirus kept local residents away from shops and restaurants while travel restrictions have brought inbound tourism to a standstill.
The city’s retail sales by value plunged 42 percent to HK$23 billion (US$2.97 billion) in March from a year earlier, according to data released on Tuesday by the Census and Statistics Department.
The city’s retail sales by value plunged 42 percent to HK$23 billion (US$2.97 billion) in March from a year earlier, according to data released on Tuesday by the Census and Statistics Department
This marked the 14th month of consecutive falls in the hard-hit retail sector. The longest losing streak on record was a two-year period that started in March 2015 and ended in February 2017.
In terms of volume, retail sales in March fell 43.8 percent, compared with a 46.7 percent drop in February. For the first quarter as a whole, the volume of retail sales dropped 36.9 percent year-on-year - the largest decline for a single quarter on record.
Sales of most categories witnessed declines. The drop in the value of luxury gifts, including jewelry, watches and clocks, reached 75.2 percent — the sharpest recorded. Only the value of sales of commodities in supermarkets rose by 16.1 percent.
The city’s retail sector has always been relying on inbound tourists — especially those from Chinese mainland. However, China’s tourists who boosted past rebounds are unlikely to occur time due to travel restrictions.
Visitor arrivals during the May Day holiday, which used to be a peak season for the tourism industry, were disappointing this year. Hong Kong recorded only 4,334 arrivals in the first three days of the holiday, with the proportion of mainland visitors dropping to about 8 percent, while some 90 percent were Hong Kong residents, government officials said.
On just one day during last year’s holidays, over 500,000 visitors from the mainland entered Hong Kong.
Business conditions for the retail trade will remain very difficult in the near term amid a deep economic recession and a sharp deterioration in the labour market, said a government spokesman.
The city has sunk into a recession with its economy reporting its steepest quarterly drop on record, shrinking by 8.9 percent in the first three months of the year.
Financial Secretary Paul Chan Mo-po said Hong Kong’s three economic development engines — consumption, investment and exports — have all stalled.
The fall in consumption widened sharply with private consumption spending — believed to have been a key reason for this contraction — falling 10.2 percent in the first quarter.
Chan said he believed private consumption could play a stabilizing role in the economy. Therefore, the SAR government will continue to focus on boosting consumption with planned initiatives, he added.
