Hong Kong catering sector banking on 2-month shopping festival to bring 20 per cent business surge as part of July 1 celebrations
- Industry players hope festivities will be buoyed by a second round of consumption vouchers to be rolled out in mid-July
- More than 150 brands and 6,000 retail stores will join campaign, to start Saturday and end August 31, featuring HK$150 million worth of discounts and goodies
Hong Kong’s catering sector is banking on a two-month shopping festival to bring a 20 per cent surge in business, with the event part of July 1 celebrations to mark the 26th anniversary of the city’s return to Chinese rule.
About 1,500 restaurants will offer reduced prices on selected menu items on Saturday, with some eateries observing a 29 per cent discount – meaning “paying 71 per cent of the price” – a play on the “7/1” date.
The promotions, together with free rides and museum visits, were announced by city leader John Lee Ka-chiu earlier this month. Sources said the drive would provide a boost for the recovering economy.
But Leung Chun-wah, chairman of the Association for Hong Kong Catering Services Management Ltd, on Friday said it was difficult for the sector to offer discounts of nearly 30 per cent, as the profits on individual orders could only be 5 to 8 per cent.
“Some eateries do not mind having no profits at all as they want residents to dine happily,” he told a radio programme, stressing it was voluntary for outlets to offer discounts.
Hong Kong retailers to offer HK$150 million in discounts, deals to get people smiling
He said sales in the catering sector had only hit 80 or 90 per cent of pre-pandemic levels, voicing hope the latest promotions and a second instalment of consumption vouchers on July 16 could boost the ailing industry by up to 20 per cent.
“We have so few customers after 8.30pm as their lifestyles have changed after the pandemic … Residents are sleeping earlier than before,” he said.
Leung added that another challenge was the 15 to 20 per cent rise in wages after the pandemic due to hiring difficulties, attributing this to an emigration wave that had seen hundreds of thousands of residents leave the city.
In the first quarter of this year, the city’s restaurant receipts jumped 81.7 per cent to HK$27.6 billion (US$3.6 billion) from the same period last year. The figure accounted for 88 per cent of the total for the first three months of 2019, before the Covid-19 pandemic in 2020.
Terence Chong Tai-leung, an economics professor at Chinese University, also expressed scepticism over the impact of the July 1 discounts.
“For one, July 1 is not a holiday on the mainland, so it’s unlikely that a large number of tourists from across the border will come to the city, while many Hongkongers will probably choose to travel abroad,” Chong said, adding that the discounts were more about creating a positive atmosphere rather than profits.
Hong Kong fans snap up 14,000 free tickets in minutes for Harbour Chill Carnival
Francis Lui Ting-ming, professor emeritus of economics at the Hong Kong University of Science and Technology, said long-term economic benefits would likely be “limited”.
He added that the discounts would cause an “intertemporal substitution effect”, meaning current consumption could lead to lower spending in the future.
“Think of it as going to a buffet lunch. After that, you eat much less during dinner,” he said.
Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, told the same radio show that she hoped the “Happy Hong Kong Shopping Festival”, which kicks off on Saturday and will ride on the second phase of the consumption voucher scheme, would boost the weak retail market.
Tse said the buying power of tourists had dropped nearly 20 per cent compared with pre-pandemic levels, although visitor arrivals were picking up.
The sector had also been hit by reduced local spending, she noted. “After the border reopened, more Hong Kong residents are travelling. Compared with before when Hongkongers stayed in the city to spend, the local consumption market is quite weak now,” she said.
Happy go ducky Hong Kong prepares for rubber ducks’ voyage to harbour on June 10
More than 150 brands and 6,000 retail stores will join the shopping festival, with free cups of coffee and prizes up for grabs, as well as a chance for a one-minute shopping spree at supermarkets. The promotions are part of the two-month event by the retail sector, which is offering HK$150 million in discounts, bonuses and other goodies.
The festival, which ends on August 31, will divide promotional activities into four categories that each span two weeks. They are: department stores and home goods; supermarkets, convenience stores and eateries; electronics and jewellery; and cosmetics, health foods and fashion.
