Incessant protests and violent clashes the past seven weeks in Hong Kong have derailed sentiment among the city’s retailers, and this could further undermine the special administrative region’s long-standing reputation as an Asian shopping paradise, the head of a retailer group said.
Retailers are concerned that the seemingly nonstop unrest in Hong Kong has had a direct impact on their businesses, as nearly all retail store branches along the protest routes have had to be closed for reasons such as employee safety issues, said Annie Yau Tse, chair of the Hong Kong Retail Management Association.
The number of inbound tourists would also see a decline, as the escalating demonstrations and violence would erode the previous impression of Hong Kong in their minds as a safe city with abundant choices in shopping.
Annie Yau Tse,
chair of the Hong Kong Retail Management Association
While demand for daily necessities such as food, usually immune to any external variables, remains inelastic, sales of nonessential, mid-to-high-end consumer goods would suffer a more severe drop under current conditions, Tse said.
She also said the number of inbound tourists would also see a decline, as the escalating demonstrations and violence would erode the previous impression of Hong Kong in their minds as a safe city with abundant choices in shopping.
Tourism has always been a key contributing factor for Hong Kong’s economy as it is closely related to the retail industry - a pillar of the city’s growth, she added.
Tse said she believes it’s a “very challenging time” for Hong Kong’s retailers, especially since the chaos has been coupled with skyrocketing rent, labor shortages and frequent staff turnover, according to a retail survey jointly conducted by KPMG and the retail association earlier this year.
Tse said she hopes that the SAR government can resolve the tension in a peaceful and cool-headed manner.
A majority of retail store branches in the Yuen Long area of western New Territories closed earlier than usual on Monday. Among the early closings were the HSBC and OCBC Wing Hang Bank branches.
Yuen Long is one of the areas where violent clashes occurred on Sunday night, as groups of men wearing white shirts attacked metro passengers and demonstrators.
Hong Kong’s retail sales slipped for the fourth consecutive month in May even as tourist arrivals from the Chinese mainland during the Labor Day holiday at the beginning of May saw strong growth.
Although there was a pretty good retail sales growth from the second half of 2017 and the first half of 2018, the momentum was quickly dampened by the trade tensions between China and the United States, Tse said.
The Hong Kong Retail Management Association previously predicted that the retail sales for the peak July-August period this year would see a double-digit drop from last summer, as the traffic-paralyzing demonstrations and the tensions behind it don’t appear to be subsiding anytime soon.
Coupled with a dismal summer outlook, the association’s earlier downward revision of Hong Kong’s full year retail sales forecast - from single-digit growth to a double-digit decline - showed concern about the large-scale protests that gripped the city.
HONG KONG NEWS