Shop sales likely to slow down despite March rise
Retail sales growth in Hong Kong is expected to slow this quarter due to weaker local consumption and smaller growth in mainland tourists' spending, despite the March figure exceeding market expectations.
Figures from the Census and Statistics Department yesterday showed retail sales in March rose 17.3 per cent year on year to HK$36.6 billion. In February, sales grew 15.6 per cent.
'The growth rate in March is higher than that of the previous month because the market was quiet in February after the Chinese New Year,' said Caroline Mak Sui-king, chairwoman of Hong Kong Retail Management Association.
But she pointed out that in the food category, sales value grew just 0.6 per cent and dropped 7.1 per cent in terms of volume in March from a year ago. Sales of fish, livestock and poultry also sank 13.1 per cent. Sales value of motor vehicles and parts as well as furniture and fixtures fell 6.2 per cent and 4.4 per cent respectively.
'These show local consumption contracted,' she said, adding that inflation and the impact of weak exports had affected Hongkongers' spending. With the industry seeing a quieter April due to bad weather, she added that she expects sales value for the month to grow just 12 per cent.
Mak also said some retailers reported only a high single-digit or low double-digit growth in sales value during the Labour Day holiday because spending by mainland tourists did not jump as before.
Mak forecasts a 12-15 per cent growth in sales value for the second quarter, compared with 15.9 per cent in the first quarter and about 21 per cent for the first quarter of last year.
A government spokesman said retail sales expanded strongly in March due to the fairly buoyant tourist spending and local consumer sentiment.
'Looking ahead, favourable labour market conditions and the prevailing strength of inbound tourism should continue to render support to the retail business in the near term,' he said. 'However, we need to stay alert to the various uncertainties on the external front and monitor how they will affect the local economy down the road.'
After netting out the effect of price changes, the volume of total retail sales increased by 13.4 per cent in March and 10.7 per cent in the first quarter compared with a year earlier.