Hong Kong retail sales take historic dip, down nearly 37 per cent by volume in first quarter, as Covid-19 continues to take toll
- March numbers mark 14th consecutive month in which spending has dropped, Census and Statistics Department reveals
- Local businesses have been forced to contend not only with social-distancing measures, but a near-total collapse of tourism
Spending in dollar terms was little better, as March became the 14th consecutive month of contraction, with sales down 42 per cent from the year-ago period to HK$23 billion (US$2.7 billion), the Census and Statistics Department revealed on Tuesday.
For the full January to March period, spending was down 35 per cent to HK$83.5 billion.
Speaking at an online press briefing, Hong Kong Retail Management Association chairwoman Annie Tse Yau On-yee said repercussions from months of social unrest had hampered businesses in January, while the pandemic took a major toll in the two months that followed.
March sales, she pointed out, were roughly at 2008 levels.
“Having the whole first quarter record a downturn is understandable,” Tse said.
Member reports of depressed market sentiment for April, following a government ban on public gatherings of more than four people, also suggested a quick turnaround was not in the offing, she said.
“Even if there is a relaxation of social-distancing measures in May and June, the economy has already been badly hit and tourists will still not come, so the overall performance for the first half will definitely be poor,” she said, predicting a year-to-year sales drop of 30 to 50 per cent for the first six months of 2020.
Since Covid-19 hit Hong Kong in January, the government has rolled out a series of travel curbs and social-distancing restrictions to contain the spread of the disease. These include closing all but three border checkpoints, suspending school and asking hundreds of thousands of civil servants and private sector employees to work from home.
Hong Kong retail sales in record 44 per cent decline amid health crisis
In March, officials expanded mandatory quarantine measures to all arrivals from abroad, while air entry by non-residents was barred entirely except for those from the mainland, Macau and Taiwan.
Tourist arrivals in Hong Kong collapsed in March – to 82,000 – down 99 per cent from the same month last year.
Poor retail sales were reflected in the first quarter’s gross domestic product, which on Monday was revealed to have contracted a worse-than-expected 8.9 per cent from the same period a year ago.
Looking ahead, Tse said the city’s retail sector, which depends to a significant degree on tourist spending, will have a wait before it sees a recovery in arrival figures.
Predicting the sector may not see improvement until late 2020, she also renewed her calls for rent relief measures from landlords, saying cuts of 10 to 30 per cent made by many developers were not enough.
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