Hong Kong retail sales plunge 13.6 per cent to record biggest slump since 1999
First two months of the year see sales slide fuelled by slumping tourist numbers, with retailers saying they have ‘no hope’
Hong Kong retail sales plunged 13.6 per cent year on year in the first two months of 2016 – the biggest slump since 1999 – and the worst may be yet to come.
Retailers are likely to see a double-digit sales decline in the first quarter and end this year with revenue contracting at a rate in the high single digits, according to the Hong Kong Retail Management Association.
Sales have been declining every month for the past year, and the latest slump is attributed to dwindling visitor numbers, which dropped 13 per cent during the same period. Visitors from the mainland fell 18 per cent despite 7 per cent growth in overseas visitors, according to the Hong Kong Tourism Board.
Large-scale lay-offs and even “a tide of shop closures” would not be surprising if the situation persists over the next few months, industry insiders warned.
“This year will definitely be worse,” said Thomson Cheng Wai-hung, chairman of the association. He admitted the extent of the current downturn had far exceeded industry expectations, with sales declining 3.7 per cent for the whole of last year.
“Apart from the severe drag from the protracted slowdown in inbound tourism, asset market consolidation might also have weighed on local consumption sentiment,” a government spokesman said, adding that the near-term outlook for retail sales would still be constrained.