Retailers take a pounding as mainland visitors rein in spending
Summer of gloom for luxury retailers, despite the number of mainlanders visiting city rising
Retailers are raising red flags over slow retail sales growth in Hong Kong, saying the industry has suffered poor growth in summer and may now be enduring the worst National Day "golden week" so far.
According to Census and Statistics Department figures, sales in August rose just 4.5 per cent in value year on year to HK$35.8 billion, while sales volume rose 3.2 per cent.
The value of retail sales climbed just 3.9 per cent and 4.5 per cent in July and August, while tourist arrivals surged 28 per cent year on year for those months.
"I think the figures are shocking," said Hong Kong Retail Management Association chairwoman Caroline Mak Sui-king.
Government data showed sales of jewellery, watches, clocks and valuable gifts - which are among the most popular items for mainland shoppers - fell 3.4 per cent in value in August.
Mak said luxury products such as branded clothes and watches had seen a large drop in sales. She said the decline might be due to the slowdown in the mainland economy, causing visitors to spend less.
Mak said the eight-day Mid-Autumn Festival and National Day holiday had seen fewer mainland visitors coming to Hong Kong and they are spending less. Apart from a weakening in the mainland economy, the recent spats between mainlanders and Hongkongers had also deterred visitors.
Mak said retail sales during the holiday week could be the worst in years, predicting that sales value could increase just 6 to 8 per cent year on year.
Stanley Lam Tung-hing, general manager of four Oriental Watch outlets, said sales had dropped about 10 per cent compared with last year. Purchases over HK$500,000 had dropped at least 30 per cent.
"We're seeing a 12 to 13 per cent drop in customers too and I think this is due to the economic slowdown in the mainland," he said. Clients were now spending about HK$50,000, compared with HK$60,000 last year.
Retail sales for the first eight months of this year climbed 10.8 per cent in value, the government said, adding that "the pace remained visibly slower than earlier this year".