Stores forecast Lunar New Year sales boost
Mall owners spend millions on decorations in expectation of up to 30 per cent growth
A reviving economy and a robust stock market may bring back double-digit growth to the local retail market during the Lunar New Year, retailers said.
Hong Kong's once vibrant retail sector has not experienced growth in the double digits since June last year. However, with buyers' appetite for shopping returning in the past two months, the Hong Kong Retail Management Association said sales in January and February could go up by between 12 and 13 per cent in dollar terms.
"The coming week will be a prime shopping time for local residents and mainland visitors ahead of the Lunar New Year, as traditionally Chinese shop for new apparel, household items and dried seafood for the festive season," said the association's chairwoman, Caroline Mak.
"With Valentine's Day falling on the first work day after the holiday this year, it is expected sales of flowers and candies will be boosted further."
Mak said florists' business could dip as much as 50 per cent when Valentine's Day falls on a public holiday, as it did in 2010.
Shopping mall owners have spent millions of dollars on decorations in the hope of generating an increase in sales of between 20 and 30 per cent from last year during the festival.
Retail sales last month rose 8.8 per cent year on year. Although the pace was slower than in November, it was much higher than the average of the four months since July, and it brought last year's total to HK$445.4 billion, a jump of 9.8 per cent from 2011.
Mak said the retail market this year could be better, especially during the second half, as the same period last year provided a low base for comparison.
Of the group's members, including all major supermarkets and retail chains, 97 per cent said they would raise salaries this year, and 90 per cent said they would give out a year-end bonus.
Mak said visitors from the mainland's second and third-tier cities would increase in numbers and might provide fresh momentum for the luxury goods sector, where growth slowed sharply during most of last year.
But even if sales grow, that is no guarantee of retailers' profitability as commercial rents double and even triple.