Hong Kong retail sales slide 2.9 per cent in smallest drop, marking reason to be optimistic
Sellers of footwear and clothing are biggest gainers while electrical goods and photographic equipment segment hardest hit
Retailers have reason to be optimistic about the future as year-on-year decline in sales narrows, falling only 2.9 per cent in October – marking the smallest drop for 2016.
The trend was credited to better visitor arrival numbers and local consumer sentiment, according to the government.
“With a very stable employment market [local consumers could be optimistic],” Hong Kong General Chamber of Commerce senior economist Rocky Tung Yat-ngok, said.
“But to balance it out, we shouldn’t be too optimistic because of the strong US dollar as well as the other [competing] tourist destinations.”
The figure, released on Thursday by the Census and Statistics Department, marked the 20th consecutive monthly decline. This year, retail sales numbers are also expected to end in the red, as sales between January and October were down 8.9 per cent year-on-year.
Retailers in electrical goods and photographic equipment, as well as those for motor vehicles and parts, were hit hardest, with sales declining 21.7 and 19.6 per cent respectively.
But footwear and clothing accessories as well as fuel retailers had reason to be optimistic, with 4.9 and 5.5 per cent increases in sales respectively.
Sellers of jewellery, watches and valuable gifts have struggled this year due to the drop in mainland visitors and spending habits.
These retailers have seen a 19.7 per cent drop in sales since the beginning of the year. But October could be a watershed month for the struggling sector, which only saw a 0.1 per cent contraction.
Retail Management Association chairman Thomson Cheng Wai-hung believed heavy discounts by retailers last month helped negate the negative impact of a depreciating yuan against the Hong Kong dollar.
The government said the near-term outlook for retail sales was dependent on the performance of inbound tourism coupled with local consumer sentiment.
But Hong Kong may find it difficult to compete with regional tourist destinations which are attracting mainland visitors at a high rate.
“Singapore [for] example, in the first eight months of the year, has seen a 44 per cent increase in visitors from China,” Tung from the Hong Kong General Chamber of Commerce said.
However, Cheng was optimistic going into December, as the festive atmosphere of Christmas was expected to boost consumption. He added that many restaurants already had Christmas dinners fully booked.