Food
The franchisee of the five restaurants, Perfect Combo, was taken to court several times this year over unpaid rental payments and other fees involving several outlets. Two of them – in Tsim Sha Tsui and Yau Ma Tei – were located in tourist hot spots.
“Conducting business in Hong Kong is not easy these days” said a manager of a medicine shop on Nathan Road, just 10 metres from the shuttered Yau Ma Tei Burger King outlet.
Nathan Road, known for its numerous jewellery and medicine shops, has been one of the favourite shopping spots for mainland tourists.
However, eight shops on a 500-metre stretch from Yau Ma Tei to Mong Kok are currently closed or vacant. The shops used to sell jewellery, watches, handbags, medicine and beef jerky, according to staff of nearby shops, and three closed just last month.
Mr Hui, the manager of a medicine shop on Nathan Road, said his boss might close the shop next year if his rent is not cut enough.
“This shop hasn’t made a cent in profit since it opened two years ago”, he said, “ Mainland tourists used to buy more health care products. Now they go for ordinary milk powder.” The shop makes more money from health care products.
“Custom has dropped one-third after the protests against parallel trading earlier this year” Hui said.
With Hong Kong’s GDP growth expected to slow to about 2.4 per cent this year, local consumers also tend to be more conservative in spending their hard-earned money.
“It’s not just mainland tourists. Local consumers have also been buying less this year,” said Mr Ng, a salesman in a sports shoe shop on Nathan Road. Ng said the shop had been offering heavier discounts this year – with prices 10 to 15 per cent lower than in the same period last year.
Other than shutting down stores completely, some retailers chose to cut the size of their shops to save rental costs. Zhongxing Watch, a Hong Kong luxury watch chain, cut the size of its Nathan Road store by one-third this year, said an employee of a nearby jewellery store. No one rents the vacant area.
Hong Kong retail sales dropped 3 per cent in October year on year despite the National Day Golden Week holiday. In the first 10 months of this year, retail sales shrank 2.7 per cent from the same period last year.
