Hong Kong retail sales slump by widest margin since January
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Retail sales in Hong Kong declined for a sixth straight month in August due to a slowdown in inbound tourism and sluggish economic conditions.
The fall was the biggest since January’s year-on-year decline of 14.5 per cent.
The government said on Friday that the tourism downturn and recent stock market gyrations might have dented consumer sentiment.
The total number of visitors dropped 6.6 per cent to 5.6 million in August, while the largest source of visitors -from the mainland – declined by 7.1 per cent.
The spokesman also said the different timing of the MidAutumn Festival, which fell in late September this year but early September last year, pushed back some sales and added weakness to the performance in August.
Sales of Chinese drugs and herbs recorded the biggest drop of 17.4 per cent among the various sectors.
Apparel and department store sales suffered further retreats of 13.5 per cent and 8.6 per cent respectively, after dropping 13.1 per cent and 7.3 per cent in July. The value of jewellery, watches and clocks and valuable gifts dropped for an eleventh month, with a decline of 8.8 per cent in August.
Bank of Communications economist and strategist Kelvin Lau Gin-yip said the continued fall in retail sales was expected, and warned that the worst was yet to come.
“The total number of visitors dropped 6.6 per cent to 5.6 million in August, while the largest source of visitors -from the mainland – declined by 7.1 per cent.”
“It is just the beginning,” Lau said.
“The tourism downturn results in downsizing for the retail sector, which further dents local consumer sentiment. This is reflected in the decline in apparel and department store sales.”
Lau also said the near-term outlook for retail sales remained subject to uncertainties, and he could not see any prospect for recovery in the short run because of the strong US dollar to which the local currency is pegged.
However, there was some positive news. Sales of miscellaneous consumer durable goods surged 50.2 per cent in August. No explanation was given.
Commerce minister Greg So Kam-leung said yesterday that the spending pattern of tourists, especially mainlanders, had changed.
He added that the government noted weakening Asian currencies had prompted tourists to visit alternative destinations, and economic uncertainties had dented tourist sentiment, which had led to slumping retail sales. He said the government would closely monitor the situation and consider possible strategies to help tourism.
Questions & Answers
Q.What was the total value of Hong Kong's retail sales in August?
What was the total value of Hong Kong's retail sales in August?
The total value of retail sales in August was HK$37.9 billion. This figure represents a 5.4 per cent decline year on year, following a 2.8 per cent drop in July, as reported by the Census and Statistics Department.
Q.Which retail sector experienced the largest decline in August?
Which retail sector experienced the largest decline in August?
Sales of Chinese drugs and herbs recorded the biggest drop among all sectors in August, declining by 17.4 per cent. Apparel and department store sales also suffered significant retreats during the same period.
Q.Why did Kelvin Lau Gin-yip, an economist, predict no short-term recovery for retail sales?
Why did Kelvin Lau Gin-yip, an economist, predict no short-term recovery for retail sales?
Kelvin Lau Gin-yip stated that he could not see any prospect for recovery in the short run due to the strong US dollar, to which the local currency is pegged. He also highlighted that the tourism downturn impacts local consumer sentiment.
Q.What positive trend was observed in retail sales for August?
What positive trend was observed in retail sales for August?
Despite the overall decline, sales of miscellaneous consumer durable goods showed a significant increase in August. This sector surged by 50.2 per cent during the month, though no specific explanation for this rise was provided.