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Denise Tsang

Retail sales fell 22 per cent year on year in September, as lingering uncertainties from the Government's stock-market intervention in August hit consumer confidence.

 Market watchers said confidence had been further undermined by a string of new government measures to counter speculation against the Hong Kong dollar.

 They said fears of joblessness and pay cuts also had intensified as unemployment reached 5 per cent.

 Hong Kong Retail Management Association chairman Philip Ma King-huen said: 'The figures are dreadful. They are getting worse every month.

 'People have no mood to spend in the wake of the instability in financial markets.'  Retail sales fell 20 per cent in August, by value and volume.

 Mr Ma said consumer sentiment was likely to have deteriorated further since September due to the recent demise of video rental chain KPS and next month's closure of Daimaru.

 By value, retail sales dropped 21 per cent to $15.3 billion in September. They fell 22 per cent by volume, after adjusting for inflation.

 Retail sales fell an accumulated 16 per cent by value or 17 per cent by volume in the first nine months of this year.

 Luxury items such as cars, jewellery and valuable goods were hit hardest, with car sales worst off with a 48 per cent fall by volume.

 Sales of clothing and footwear fell 37 per cent.

 Ruby Wan Man-yu, public relations manager of store operator Jusco Stores (Hong Kong), said consumers felt insecure and had minimised spending.

 Sales of food, alcoholic drinks and tobacco fell 5 per cent and supermarket sales dipped 4 per cent.

 Jim Tak-hing, chief executive of Pizza Hut, a unit of Jardine Pacific, said the chain had seen sales fall sharply in the past few months.

 'Consumers' behaviour has changed. They seem to be saving instead of going out. This is fatal for retailers,' he said.

 'I don't see spending in Christmas improving much. Consumers used to wait for discounts at Christmas, but this year they don't need to as discounts have been offered since the start of this year.'  Despite Hong Kong banks lowering interest rates three times, retailers did not expect any immediate positive impact on spending.

 Ms Wan said: 'The retail sector is normally the first to suffer and the last to recover in any economic downturn.' 



Sales plunge 22pc as retailers rocked by confidence decline