Hong Kong’s retail sales picked up speed in August, extending their expansion streak to 16 months, as rising incomes underpinned local consumer sentiment and the continued rebound in visitor arrivals provided an additional boost to spending.
Most retailers are expecting sales during the Chinese mainland’s National Day holiday — which runs till Oct 7 and typically brings large numbers of visitors to the Hong Kong Special Administrative Region — to be higher than a year earlier or to remain stable.
The value of total retail sales rose 5.6 percent year-on-year to HK$32.1 billion ($4.09 billion), accelerating from a 4.5 percent increase in July, the Census and Statistics Department said on Friday.
Online sales accounted for 8.7 percent of total retail sales in August. The provisional estimate for online retail sales rose 9.9 percent from a year earlier to HK$2.8 billion.
By category, sales of “electrical goods and other consumer durable goods not elsewhere classified” surged nearly 30 percent on a yearly basis, making it one of the strongest-performing segments. Sales of “jewelry, watches and clocks, and valuable gifts” rose 11.9 percent.
A HKSAR government spokesman said growth was seen across many types of retail outlets, while the notable rise in online sales value reflected consumers’ shift towards digital channels.
Looking ahead, “sustained economic expansion and rising labor earnings should support local consumption sentiment and spending,” the spokesman said, adding that continued growth in visitor arrivals and a series of upcoming mega-events should further inject vibrancy into the retail sector.
The latest official figures showed Hong Kong residents’ total income rose 7.9 percent year-on-year in the second quarter to HK$966.1 billion.
Data from the Hong Kong Tourism Board showed visitor arrivals reached 5.46 million in August, the highest monthly total since the COVID-19 pandemic.
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Hong Kong recorded over 277,000 mainland visitor arrivals on Thursday, the first day of the National Day holiday, increasing by more than 40,000 from the same day last year, according to the Immigration Department.
Bond Law, executive director of the Hong Kong Retail Management Association (HKRMA), said the association surveyed about 4,400 retailers and 89,000 employees. Roughly 65 percent of respondents expect sales during the seven-day holiday to rise, mostly by single digits. Cosmetics retailers are the most optimistic, forecasting double-digit growth.
Law said that while foot traffic has increased, visitors’ spending remains cautious. He also noted that Hong Kong’s public holiday fell on Thursday this year, which could prompt many residents to take an extra day off to create a long weekend and travel to the mainland or Southeast Asia. This could weigh on local consumption, Law added.
For September, about three-quarters of the retailers surveyed reported sales growth, partly because the weather was better than in last September, which made it more favorable for tourist arrivals, HKRMA Chairwoman Annie Tse Yau On-yee said.
Law said he expects the value of total retail sales for the full year to post single-digit growth, supported by major cultural, sports and other large-scale events. However, developments in geopolitical tensions in the Middle East could increase retailers’ costs, he said.
