High-end retailers lead brisk holiday business
Retailers reported strong sales growth during the Lunar New Year, although stores that sell luxury and high-end goods such as jewellery performed better than supermarkets and other shops selling food and daily necessities.
Retail Management Association chairman Bankee Kwan Pak-hoo said that in the week before the Lunar New Year and during the holiday period, sales of luxury goods improved between 10 and 20 per cent compared with a year ago.
Sales at supermarkets and various fast-food outlets also increased year on year but in single digits.
Some association members that reported robust sales growth noted that many tours destined for the mainland had to be cancelled because of the dangerous snowstorms and icy conditions that have plagued many areas.
Although travel plans were ruined, more people ended up staying in Hong Kong over the holiday, and their spending helped boost sales.
There were initial fears the winter weather would hurt tourism and sales in Hong Kong during the Lunar New Year as the heavy snowfall on the mainland stranded hundreds of thousands of people. But the cold does not appear to have dented business in the city at the start of the Year of the Rat.
However, Hong Kong relies heavily on mainland supplies of pork, beef and other food and materials, and Mr Kwan said the city had had to put up with significantly higher prices as a result of the widespread weather-related problems.
The higher costs, together with escalating business overheads, such as rent, were squeezing profit margins.
He said there was not much change in the holiday operating hours of stores compared to a year ago. Most shops closed on Thursday, the first day of the Lunar New Year holiday, but reopened the following day.
