Estimated 10,400 retail workers axed, 5,200 shops to close in Hong Kong by end of May as coronavirus hammers sector, trade body warns

An estimated 10,400 workers in Hong Kong’s coronavirus-stricken retail sector will have lost their jobs and at least 5,200 stores will close down by the end of May, an industry body says, warning thousands more shops could shut later in the year.

The grim forecast was made on Thursday by the Hong Kong Retail Management Association, which surveyed 152 firms – operating 3,345 stores and employing about 23 per cent of the sector’s workforce – between March 31 and April 9.

Association chairwoman Annie Tse Yau On-yee said 96 per cent of the companies suffered losses during the public health crisis and the latest HK$137.5 billion government relief package could only delay a rise in the city’s jobless rate.

With the wage subsidies offered under the scheme, Tse believed retailers could stay afloat if they secured short lease terms with affordable rents from landlords.

“But it is just for a very short period. When the relief measures on wage bills and short lease term end, if social sentiment and business environment remain bad, then by that time, there may be shutdowns, causing lay-offs,” she said.

She added that although members welcomed the wage subsidies, they might not be able to cover sales staff’s normal income because part of it came from commission, which had largely been cut recently. Also, it was difficult for businesses to keep their headcount unchanged to make them eligible for the scheme if they planned to close outlets.

Tse was referring to the government’s HK$80 billion plan to help employers pay a monthly salary of up to HK$9,000 for each of their workers for six months. Some 1.5 million private sector employees were expected to be covered.