Hong Kong retail sales fell by 23.6 percent in November from a year earlier, recording its fifth month of double-digit decline, as six months of social unrest in the city continues to deter visiting shoppers and tourists.
In its 10th month of consecutive falls, retail sales in the protest violence-plagued city slumped to HK$30 billion ($3.86 billion), according to data released on Friday by the Census and Statistics Department.
According to our members, local consumption sentiment has improved slightly during the Christmas and New Year holidays, since the scale and impact of several incidents were smaller comparatively. But there are still few tourists, while retail sales during the holidays are usually driven by visitors
Annie Tse Yau On-yee, chairperson of the Hong Kong Retail Management Association
For the first 11 months of 2019, total retail sales have dropped 10.3 percent compared with the same period last year.
Violence in society has caused severe disruptions to tourism and consumption-related activities and a further dampening of consumer sentiment, the government said in a release on Friday.
The near-term outlook for the retail trade would hinge on “how the local social incidents will evolve”, it added.
Retail sales in December are expected to bounce back a little, said Annie Tse Yau On-yee, chairperson of the Hong Kong Retail Management Association.
“According to our members, local consumption sentiment has improved slightly during the Christmas and New Year holidays, since the scale and impact of several incidents were smaller comparatively,” she explained. “But there are still few tourists, while retail sales during the holidays are usually driven by visitors.”
Visitor arrivals to Hong Kong tumbled nearly 30 percent year-on-year during the New Year holiday. Data from the Hong Kong Immigration Department showed that the city received about 800,000 inbound visitors from Dec 31 to Jan 1.
Tse forecast retail sales during the Spring Festival holiday later this month will be similar to that during the Christmas holidays. And the dire situation for retail sector will continue in the first half of 2020.
“The comparison base in the first half of 2019 is high. Moreover, the industry will enter its off-season period after the Spring Festival. So it is hard to say if the situation will get better,” explained Tse.
Gary Ng, economist at investment bank Natixis, said the city’s retail sector had an opportunity to return to a single-digit growth in the second half of the year.
He said that many small- and medium-sized enterprises would enter a period of adjustment around Luna New Year. There may be waves of closures and lay-offs.
Several retailers are closing down or planning to shut down operations in Hong Kong. Japanese matcha tea cafe Nakamura Tokichi has decided to close down its stores in Admiralty and Tsim Sha Tsui, as revenues continue to fall.
Luxury brand Louis Vuitton was reported to have planned to close its store at Times Square in Causeway Bay, after negotiations with the mall to cut rents fell apart.
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