In this Sept 11, 2020 file photo, people wearing protective face masks line up and wait outside a Guccio Gucci SpA store at Harbour City in Hong Kong, China. (PHOTO / BLOOMBERG)
Hong Kong recorded a 4-percent year-on-year decline in retail sales in November, the smallest drop in 17 months, thanks to an easing of the COVID-19 pandemic before the fourth wave, and surging demand for durable goods, government statistics revealed on Monday.
However, as the fourth wave of the outbreak has weighed on sentiment since late November, the business environment of the retail trade will remain challenging in the near term, a government spokesman said.
The value of retail sales in November last year was HK$28.7 billion (US$3.7 billion), a 4 percent decrease compared with the same month in 2019, beating the 7.4-percent market expectation. It was the smallest decline since June 2019, when protests-hit retail sales dropped 6.7 percent.
The value of retail sales in November last year was HK$28.7 billion (US$3.7 billion), a 4 percent decrease compared with the same month in 2019, beating the 7.4-percent market expectation. It was the smallest decline since June 2019, when protests-hit retail sales dropped 6.7 percent
In October, retail sales fell by 8.7 percent year-on-year.
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In terms of volume, November’s retail sales retreated 4.7 percent year-on-year, an improvement from the 9.2-percent decline in October.
A government spokesman said that the year-on-year decline in retail sales narrowed further in November, primarily due to a notable increase in sales of electrical goods and other consumer durable goods, which increased by 22 percent in value.
Considerable increases were also seen in sales of motor vehicles and parts, which rose by 22.2 percent, and furniture and fixtures, an increase of 15.1 percent. Sales of commodities in supermarkets also rose by 1.6 percent.
Declines were still seen in most categories, with medicines and cosmetics recording the sharpest drop of 34.8 percent. Sales of jewelry, watches and clocks, and valuable gifts, clothing, as well as food and drinks, were all down from 8.8 percent to over 15 percent.
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The government allocated additional support to businesses hurt by the shutdowns and Financial Secretary Paul Chan Mo-po said in a blog post Sunday that the economy will probably return to growth in 2021 as the recovery strengthens in the second half of the year.
Annie Tse Yau On-yee, chairperson of the Hong Kong Retail Management Association, predicted a gloomy picture for retail sales in December and January.
Tse said that December is traditionally the peak season for retailers, but because the government tightened social distancing measures in early December in response to the fourth outbreak of the pandemic, the overall retail performance won’t be satisfactory.
READ MORE: HK retail sales see record 44% slump in February
Despite the upcoming Lunar New Year, Tse also said she believes the retail sector won’t see a major improvement in January, while supermarkets are likely to suffer a 20 to 40 percent decline compared with the January 2020, when the pandemic hadn’t yet hard hit Hong Kong.
Tse added that she’s pessimistic about overall consumer sentiment, and predicted that a large number of retail stores will shutter after the Lunar New Year.
With inputs from Bloomberg
