Tourist shopping, low comparison base lead to surge in April retail sales

PUBLISHED : Wednesday, 02 June, 2010, 12:00am
UPDATED : Wednesday, 02 June, 2010, 12:00am

Retail sales in Hong Kong rose strongly in April, helped by free-spending mainland tourists and also lifted by last year's exceptionally low base, but the sector still faces challenges over soaring rentals and a planned minimum wage law.

The Census and Statistics Department said total retail sales increased to HK$25.1 billion in April, a 15.6 per cent jump from the year before. Total retail sales volume rose 12.4 per cent year on year after factoring in price change effects over the same period.

For the first four months of the year, total retail sales rose 18 per cent in value, and 15 per cent in volume from the previous year.

Caroline Mak Sui-king, the chairman of the Hong Kong Retail Management Association, said the lower rise in volume compared to sales indicated the effects of mild inflation.

Sales volume for vehicles and parts showed the biggest increase of 54 per cent, followed by sectors popular with mainland tourists such as electronics, and jewellery and watches which grew 26.1 per cent and 22.1 per cent respectively.

Mak said the increases can partly be attributed to a base effect as Hong Kong's retail industry had still not fully recovered from the recession this time last year.

'A full recovery did not happen until September 2009, so only from that point onwards can we say that the comparisons are back to a normal level,' she added.

She said the minimum wage level, which has yet to be decided, would be a concern for small business owners like fast-food restaurants. In addition, retailers across all sectors were under pressure from rising rents.

'Some sectors which can rely on spending by mainland tourists are able to afford renting out two or three floors of one property, thus pushing up rents and distorting the rental market,' Mak said.

Keeping watch

Forthcoming minimum wage and rising rents still pose a challenge

According to the Census and Statistics Department, retail sales in April climbed to, in HK$ $25b

The biggest increase was seen in the sales volume for vehicles and parts with: 54%