Retail sector fears 2012 sales-growth slowdown
Hong Kong's shopaholic culture may take a hit next year because of rising inflation and fears of a global slowdown, retailers warn.
Although retail sales growth in August remained strong and jumped 29 per cent year on year to HK$34.3 billion, the growth is still fuelled by big spending mainland visitors, buying expensive accessories and electronic products. Inflation continued to squeeze domestic consumption even in August, a traditionally busy month for shoppers ahead of the Mid-Autumn Festival in September.
High food prices not only dampened household consumption, but also eating out, according to the Retail Management Association, which said restaurant business during the National Day 'golden week' holiday was slower than last year. 'Golden week' ends on Friday.
'Of course there was the impact of the typhoon [Nesat], but high food inflation also took a toll as restaurant owners found that business has been slowing since September compared to the start of this year,' said Caroline Mak Sui-king, the association's chairwoman. However, she still projected up to 25 per cent growth in retail sales during the week-long holiday.
'The sector must be cautious about next year, however,' Mak said, saying Europe's debt crisis, coupled with falling air cargo volumes at Hong Kong International Airport, did not augur well for the world economy. 'Growth in retail sales value for next year could be just around some 10 per cent, given the high base this year.' The association said earlier that retail sales would grow more than 25 per cent by the end of 2011.
While sales of food and drink reached HK$2.84 billion in August, up 14.8 per cent year on year, most of the increase came from inflation, and sales volumes jumped only 0.2 per cent. Moon cakes, bread, pastries and drinks saw a rare growth in both volume and sales value, but sales volumes for fresh fruit, fish, poultry and canned food continued to fall.
Furniture and fixtures recorded 15.3 per cent year-on-year sales-volume growth in July, but sales volumes fell 1.8 per cent in August. Mak said this could reflect stagnating sales of second-hand homes.
Meanwhile, labour shortages loom as a problem for the sector. In a poll of 2,800 shops conducted by the association, there were more than 3,000 unfilled job openings.