Spending by holiday visitors lags increase in arrivals
This year's "golden week", a national holiday, lacked lustre, says the Hong Kong Retail Management Association, whose members run more than 6,700 retail outlets in the city.
Retail sales grew about five per cent from last year during the mainland's three-day Labour Day holiday, below the group's forecast of 10 to 12 per cent.
That reflects a recent trend of Hong Kong's waning appeal to wealthy mainlanders.
According to government statistics, retail sales growth in the city slowed to 13.9 per cent in the first quarter, down from 15.8 per cent in the same period last year.
The association expects retail sales growth to hit 10 to 11 per cent this quarter due to restrictions on the export of milk powder and the yen's depreciation.
Caroline Mak Shui-king, the association's president, said the high growth resulting from the mainland's Individual Visit Scheme was now in the past.
"Our retail sales surged 1.5 times in the 10 years since the scheme was introduced in 2004. This is a stunning rise, so at some point it will stop," Mak said, warning retailers to be cautious amid ever-rising costs and a shift to lower-priced purchases. Immigration statistics show the total number of arrivals in the city during the three-day holiday ending on May 1 - commonly known as the "golden week" before Beijing cut short the holiday in 2008 - rose 9.5 per cent from the same period last year.
Mainland arrivals grew 15.1 per cent. But as visitors from less wealthy cities comprise a major percentage, the growth of their spending is lagging the growth in their numbers.
TSL Jewellery said it had long ceased having high hopes for the golden week holiday, as more mainlanders had been spreading out their spending during weekend trips to Hong Kong.
Retail analyst Felix Kwok said besides mainlanders spending more frugally, Beijing's crackdown on graft had also hurt sales of luxury goods.