Why we should stop publishing retail sales statistics
‘These retail sales figures ... actually misrepresent the trends’
Retail sales slip despite rise in mainland visitors
I have a question for you. Have you ever set foot inside one of those gaudy shops that specialise in selling pretentious fashion goods to yokel mainland tourists who then lug all the flash away in big suitcases on rollers?
You have? Well, once is allowed, I suppose, but otherwise you are holding the wrong part of this newspaper. The Life section is further along.
It intrigues me because every month our statisticians publish retail sales statistics that they say represent the trend in local retail establishments. Yet for the last five years it has really only been the trend in high turnover mainland tourist shops, most of which are mainland owned or chained to their foreign brand names.
The two charts tell the story. The blue line in the first one shows you the year on year growth of the value of retail sales as determined by our statisticians. I have put this on a six-month average basis as these numbers otherwise jump up and down like a seismograph in an earthquake.
The red line takes consumer spending in the domestic market from our gross domestic product figures and subtracts the portion of it attributable to visitor spending. I have then put this on the same six month average growth rate.
We have a simple story here. What we residents of this town spend as consumers is rising, not falling. It is those glitter parlours that feel the pinch and who really cares if they do? They are not Hong Kong. They are only a piece of the mainland which has drifted into Hong Kong.
What is more, the reason that a rise in mainland visitors is not doing much just now for the glitter parlours is that their money appears to be going more to flight than frivolity. This at least is what I see from mainland capital outflow figures. It is the money changers with whom these people are doing business.
The second chart puts the retail sales figures into another important perspective. They constitute too thin a sample. They entirely ignore spending on consumer services, which constitutes more than half of total consumer spending and they also entirely ignore internet shopping.
But it is services and the web where consumers are increasingly going. The one element of consumer spending to which the retail sales figures give a full and total weighting, however, is the glitter parlours.
Thus take that red line for total consumer spending by local residents and you get an annual total of HK$1.5 trillion at present. But take the retail sales figures and, even with the tourist spending, you get only HK$436 billion a year.
Let me be boring and belabour what the chart clearly shows without my devoting any words to it. The blue line here stands at less than a third of the red line and is steadily down while the red line continues to rise.
Conclusion: These retail sales figures are worse than useless. They actually misrepresent the trends.
Recommendation: Our statisticians should adapt them to the times or stop publishing them.
Likelihood of this happening: In government? None at all.