Two men (center) chat as they walk through the central business district in Hong Kong on March 1, 2023. (PHOTO / AFP)

HONG KONG – Hong Kong retail sales surged 31.3 percent year-on-year in February, the highest in 13 years, amid the continued improvement in consumer sentiment and the sharp rebound in tourist arrivals.

The value of total retail sales in February was estimated at HK$33.1 billion ($4.22 billion), posting the biggest percentage growth for a month since February 2010 when it grew 35.8 percent.

The revised estimate of total retail sales in January also increased by 6.9 percent compared with a year earlier, according to data released by the Census and Statistics Department on Friday. 

Provisional estimates showed that the value of total retail sales in the first two months of 2023 rose by 17.3 percent compared with the same period in 2022, it added.

Tourist arrivals in Hong Kong in February soared nearly 557 times from a year earlier to 1.46 million, exceeding one million for the first time in three years. That compared with 2,626 visitors in February 2021 and about 70 times growth in January to 498,689

A Hong Kong Special Administrative Region government spokesman said the low base of comparison last year also contributed in the surge in retails sales.

Taking the first two months of 2023 together to remove the possible distortion caused by the difference in timing of the Lunar New Year, the value of retail sales rose notably by 17.3 percent year-on-year.

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Of the total retail sales value in February 2023, online sales accounted for 7.8 percent. The value of online retail sales in that month, provisionally estimated at HK$2.6 billion, decreased by 4.1 percent compared with the same month in 2022. 

For the first two months of 2023 taken together, it was provisionally estimated that the value of online retail sales decreased by 3.7 percent compared with the same period in 2022.

Comparing the combined total sales for January and February 2023 with the same period a year earlier, the value of sales of jewellery, watches and clocks, and valuable gifts increased by 62.6 percent. 

This was followed by sales of other consumer goods not elsewhere classified (+13.7 percent); electrical goods and other consumer durable goods not elsewhere classified (+11.4 percent); food, alcoholic drinks and tobacco (+0.1 percent); wearing apparel (+47.4 percent); commodities in department stores (+10.4 percent); medicines and cosmetics (+22.4 percent); motor vehicles and parts (+49.3 percent); fuels (+14.1 percent); footwear, allied products and other clothing accessories (+40.4 percent); Chinese drugs and herbs (+51.1 percent); books, newspapers, stationery and gifts (+45.2 percent); and optical shops (+53.2 percent).

On the other hand, the value of sales of commodities in supermarkets decreased by 13.5 percent in the first two months of 2023 over the same period a year earlier. This was followed by sales of furniture and fixtures (-8.5 percent).

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Looking ahead, the government spokesman pointed out that the retail sector performance will continue to benefit from the recovery of private consumption and inbound tourism.

Tourist arrivals

Tourist arrivals in Hong Kong in February soared nearly 557 times from a year earlier to 1.46 million, exceeding one million for the first time in three years. That compared with 2,626 visitors in February 2021 and about 70 times growth in January to 498,689.

Among the arrivals, Chinese mainland visitors jumped to about 1.11 million in February from 280,525 in January, while non-mainland visitors rose to 353,316 in February from 218,164 in January, Hong Kong Tourism Board's data showed.

The city's seasonally adjusted unemployment rate eased to 3.3 percent in the December to February period, from 3.4 percent in the November to January period.

READ MORE: Hong Kong's December retail sales up 6.2%

Benefiting from the travel relaxation measures, jewellery chain operators Chow Tai Fook said its same store sales growth for Hong Kong and Macao SAR increased 70 percent on year for January-February, while Chow Sang Sang's sales in the two cities were up about 89 percent for the period from Jan 1 to March 15.

With Reuters inputs