Fresh food sales fall as spending gap gets bigger
Sales of fresh and frozen fish, livestock and poultry fell for a third consecutive month in June, but mainland tourists' shop-till-you-drop ways are underpinning Hong Kong's retail market.
The Hong Kong Retail Management Association expressed concern at the growing gulf between spending on daily necessities and the buying of luxury items and electronics products, largely by mainland visitors.
'I haven't seen a trend like this in the past decade,' said the association's chairwoman Caroline Mak.
'The imported spending power is driving up rents to an unrealistic level, while local consumers have to cut down on food and daily items because of rising inflation.'
Overall retail sales jumped 28.8 per cent year-on-year in June to HK$31.3 billion in terms of value.
However, consumption of fresh and frozen fish, livestock and poultry fell 15.2 per cent in terms of volume, following a 13.9 per cent drop in May and a 14 per cent fall in April.
Sales volumes at supermarkets also fell by 3.5 per cent in June, although surging prices meant their sales rose 12.6 per cent year-on-year. Escalating fuel prices meant that volume growth was far behind the growth in the value of sales.
Mak said the falling consumption meant many restaurants and fast-food chains were beginning to realise they could no longer automatically pass on higher costs to customers.
'They are using a combination of solutions now - smaller food servings, cuts in staff and work hours, coupled with moderate increases in prices,' Mak said.
Electronic goods were one of the few categories where growth in sales volume kept up with growth in sales value, with both jumping more than 70 per cent in June year-on-year.
Sales of jewellery, watches and expensive handbags reached HK$7.3 billion, accounting for more than one fifth of the total sales.
A government spokesman said he expected the retail market to remain buoyant for the next few months.
But Hong Kong's consumer confidence index plunged for a seventh quarter to a new low of 79.3 points out of 200 in the second quarter.
Mak said the consumption pattern was unhealthy. 'Retail rents in Russell Street in Causeway Bay and Queen's Road in Central are now ranked the second and the third most expensive in the world,' she said.
'A five-storey store for fashion brand Shanghai Tang in Central cost HK$218 per sq ft, while some third-rate shops in areas like Sham Shui Po have been forced to close.'