Hong Kong's annual retail sales figures fell for the first time since the Sars outbreak in 2003, declining 0.2 per cent last year - mainly due to lower sales of luxury products and some durable items as tourists left less cash behind. Year-on-year sales values in December dropped by 3.9 per cent to HK$47.8 billion after four months of consecutive growth. The government said that reflected "the slackening in visitor spending". The worst figures in 11 years were dragged down mainly by a 13.7 per cent fall in sales of luxury goods, which include jewellery, watches and other high-end items. That was followed by an 8.1 per cent drop in sales of electrical goods and photographic equipment, which fall under the category of durable goods. But despite the decline, an economist said he was optimistic retail sales would rebound this year because the economy was improving. Last year's total retail sales came to HK$493.3 billion, which represented a decrease of 0.2 per cent in value but an increase of 0.6 per cent in volume when compared with 2013. Caroline Mak Sui-king, chairwoman of the Retail Management Association, attributed the decrease in sales value to the central government's crackdown on graft and a drop in non-Chinese tourists. She said that although the number of mainland tourists increased by 16 per cent last year, that did not necessarily indicate a rise in spending power. Mak said Occupy Central had affected sales, but "not entirely", she added, citing high rent and a labour shortage as additional challenges. Ryan Lam, a senior economist with Hang Seng Bank, said the latest data was worrying. He said two factors had affected the retail sales performance: the price of gold, for one, dropped significantly in 2013 and stimulated spending. But Lam said the price had since stabilised, which meant people were less interested in buying gold. "The wealth effect has also [declined] as the housing market slowed down last year and so the local consumer sentiment has weakened," Lam said. The economist said retail sales would likely continue to fluctuate in the short term, but he predicted improvement in the US and Hong Kong economies would drive local spending. However, the government remained cautious on the outlook as it said the near-term performance of retail sales would still hinge on labour market conditions and tourism growth. "We also need to closely watch over how various uncertainties in the external environment will play out and affect local consumption sentiment down the road," a government spokesman said.