Cross-border tourists fuel double-digit sales boost
Hong Kong retail sales enjoyed double-digit growth in May for the second month in a row, thanks to the boom in mainland tourists.
However, industry insiders noted that the numbers looked impressive because they were compared to sales figures from May last year, when the Sars outbreak kept people out of stores.
Sales leaped 19.7 per cent to $16.5 billion in May, the government said yesterday. After factoring out the effects of deflation over the past year, retail sales increased 15.8 per cent, the second highest pace since January 2000.
'It's basically due to the lower base effect due to Sars, and also due to booming tourism,' said Daniel Chan Po-ming, senior investment strategist at DBS Bank Hong Kong.
Hong Kong's retail sales have been growing for 10 months after shrinking for most of the previous two years. In the first five months of the year, sales expanded 11.2 per cent, the government said.
But the chairman of the Hong Kong Retail Management Association, Yu Pang-chun, said the numbers should be compared to 2002, which was not affected by Sars.
'In a way, it's impressive,' Mr Yu said. 'But if we look at the comparison with 2002, actually it's about a 6.3 per cent increase over May 2002,' he said, adding that when the first five months of 2004 were compared with the same period in 2002, the sales increase amounted to 5.4 per cent.
The government said sales growth reflected inbound tourism and local demand. But Mr Yu disagreed, saying figures showed tourists were primarily responsible.
'If we look at the breakdown of categories, it's still predominantly influenced by the Golden Week holiday [in May], because the major increase is from jewellery, watches, brand names and audiovisual and electrical,' he said.
Mr Yu added that a lot of the association's 500 members were telling him local retail spending was not as strong as expected.
