Since August the luxury goods sector has reported a fall in sales of big ticket items - such as multi-carat diamond rings and watches that cost millions of dollars - although this has been partly offset by ballooning sales in medium- and lower-priced items, backed by a growing number of mainland tourists.

According to the Census and Statistics Department, year-on-year growth in sales volume of jewellery and watches fell from 46.2 per cent in May to 15.9 per cent in December.

Caroline Mak Shui-king, chairwoman of the Hong Kong Retail Management Association, said low- and medium-priced jewellery might not be selling as strongly as before. 'Recently we saw slackening growth in the number of mainland tourists - and we haven't seen that in a very long time,' she said.

Mak warned that some luxury goods shops, which have overexpanded in districts with sky-high rents over the past year, may face falling profits and even shop closures.

'In some areas, jewellery shops are as common as convenient stores, It's not healthy for any business to operate like this with such high costs,' she said.

A total of 706,748 mainland visitors, including those in tour groups and individual travellers, arrived during the Lunar New Year holiday between January 22 and January 28, up 6.6 per cent from last year. But out of this total, the number of individual visitors, who tend to be the big spenders, grew only 4.4 per cent.

Retail sales during the festival were weaker than expected, and the association said it had adjusted its expected sales growth in the two months to February to 18 per cent year on year. It said some jewellery chains reported minor growth during Lunar New Year, although vendors of durable goods and smartphones reported continued strong growth.

'Given a slowing economy and sharp growth in retail sales over the past three years, it would be unrealistic to expect another year of 25 per cent retail sales growth,' Mak said. 'We should be very happy if we could achieve 15 per cent in 2012.'