Signs of hope for Hong Kong’s retail sector as sales drop eases in September
Decline narrows to 4.1 per cent compared with 10.5 per cent slump in August
The city’s retail sector show signs of stabilisation on improved tourist figures, with a narrower 4.1 per cent decline in the value of September sales on a year earlier, the smallest fall in almost a year, official figures showed on Thursday.
It was a marked improvement on the 10.5 per cent slump in the previous month, when travellers were held back by stormy weather and the Rio Olympics.
A government spokesman said the reduced drag from the drop in visitor arrivals in September – down 3 per cent on the same month last year, an improvement on the 9.4 per cent fall in August – contributed to the softer sales decline.
“Some improvement in consumer sentiment amid a somewhat more stable external environment” also helped lift the retail industry, he added.
The latest retail figures indicated that the troubled industry may finally have reach bottom, as third-quarter retail sales decreased only 0.6 per cent compared with the preceding quarter.
“We have yet to see a strong turnaround in Hong Kong tourism and retail, but we believe that trends have stabilised in September and October,” CLSA senior analyst Mariana Kou said in a research report. She added that the performance for mid-end players would likely pick up in the second half of the year, on reduced rents and an easier comparable base last year.
Retail sales in the city have now declined for 19 consecutive months.
Jewellery, watches and other luxury items – products usually popular with mainland Chinese visitors led the declines in September in value terms, but recorded a much smaller drop – down by 12.3 per cent compared with a 26.2 per cent slump in August.
Sales of commodities in supermarkets slipped 0.4 per cent, while food, alcoholic drinks and tobacco fell 3.1 per cent.
But there were also some rebounds. Sales of clothes were up 1.8 per cent, and medicines and cosmetics added 1.2 per cent.
“Looking ahead, the near-term outlook for retail sales is still subject to uncertainty, depending on the performance of inbound tourism as well as the extent to which local consumer sentiment will be affected by various external uncertainties,” the government spokesman said.