Retail sales have fallen sharply in the past few weeks due to the financial turmoil and are likely to remain subdued to the end of the year, the head of Swire Pacific's trading operations said.
Swire executive director James Hughes-Hallett said: 'The retail market is pretty awful.
'At our biggest retail operation, Marathon Sports, we are seeing quite a sharp drop in sales for the past four or five weeks.' Speaking at the opening of Taikoo Motors new Volvo showroom in Cheung Sha Wan, Mr Hughes-Hallett said the poor retail conditions were likely to last at least until the end of the year as rising interest rates and the general uncertainty reduced consumer confidence.
'For the remainder of the fourth quarter the retail market in Hong Kong is bound to be bad,' he said.
Swire Pacific handles a wide variety of retail operations in Hong Kong ranging from Marathon Sports and The Athlete's Foot, to its Volvo distributorships.
Mr Hughes-Hallett said the Volvo car business, operated under Taikoo Motors, was likely to be less affected by the turmoil than the sales of lower-end cars.
'I don't see the retail environment having as much impact on Volvo sales as on lower-end cars as we have a very loyal customer base.
'The Volvo owner is not typically the kind of person who borrows heavily to invest in the stock market.' Mr Hughes-Hallett said Taikoo Motors would continue to take a long-term strategy and not seek to lower prices to ease the effect of the retail slump.
He said the Swire Group was also keen to seek further expansion of its car operations, following its purchase from Jebsen & Co earlier this year of the Volvo dealerships in Hong Kong and southern and central China.
The company already owned the distributorships for Volvo cars in Taiwan, which it acquired in 1977, and in northern and eastern China which it bought in 1993.
'We are still very anxious to expand our motor car business and upgrade our facilities. We are confident we can increase Volvo's market share,' Mr Hughes-Hallett said.
He said the group was looking to add another brand to combine with its Volvo distributorships.