Hong Kong’s retail sales plunge most in 17 years

Hong Kong’s retail sales in February plunged the most since 1999 as fewer Chinese tourists visited the territory during the Lunar New Year holiday.

Retail sales dropped 21 percent in February to HK$37 billion (US$4.8 billion) year-on-year, according to a statement from the Hong Kong’s Department of Statistics.

Combining January and February, sales fell 14 percent. The monthly decline is the worst since January 1999 when sales were also down 21 percent.

“Apart from the severe drag from the protracted slowdown in inbound tourism, the asset market consolidation might also have weighed on local consumption sentiment,” the Hong Kong government said in a statement yesterday. “The near-term outlook for retail sales will still be constrained by the weak inbound tourism performance and uncertain economic prospects.”

The government will monitor closely its repercussions on the wider economy and job market, it said.

Chow Tai Fook Jewellery Group, the world’s largest listed jewelry chain, and Sa Sa International Holdings reported slumping sales over the holiday from Feb. 7 to Feb. 13 when Chinese tourists to the territory dropped 12 percent.

The stock market rout and a slowing Chinese economy have affected consumer sentiment for luxury goods, Chow Tai Fook has said.

Mainland China tourists “are unlikely to come back in the short term,” CCB International Securities analyst Forrest Chan said.

Hong Kong residents are also consuming less due to stagnant property values and the weak stock market, he said.

“Hong Kong’s retail market will continue to fall for the rest of 2016 as all the negative factors won’t be solved in the near term,” Chan said in a telephone interview.

Chinese visitors are projected to fall 3.2 percent for the year, according to the Hong Kong Tourism Board, with average spending dropping 4 percent to HK$6,948.

Sales of jewelry, watches and clocks, and valuable gifts dropped 24 percent, while those of electrical goods and photographic equipment plunged 27 percent, according to yesterday’s statement.