Hong Kong shoppers continued to shy away from spending as retail sales tumbled 18.3 per cent in September year on year on the double blow of the ongoing social unrest and the protracted US-China trade war . Consumer spending dropped to HK$29.9 billion (US$3.83 billion) for the month after a record 22.9 per cent fall in August, according to the Census and Statistics Department on Friday. Annie Tse Yau On-yee, chairwoman of the 9,000-member Hong Kong Retail Management Association, warned of a wave of shutdowns and lay-offs at retailers in the fourth quarter of this year – her biggest worry – as she expected the steep decline would linger. Local consumption, already weakened by the trade war between the United States and mainland China, took a battering amid the anti-government protests and with tourism in the doldrums. Since protests erupted against the now-shelved extradition bill in June, demonstrations have taken place every weekend and spilled over into shopping malls. As radical protesters vandalised MTR train stations, rail services were reduced. “As protests involving violence continue to deter tourists and reduce local consumption, and the subdued economic outlook also dampens consumer sentiment, the performance of retail sales is likely to stay weak in the near term,” a government spokesman said. The September figure was another significant drop, he added. In the first nine months of 2019, retail sales shrank 7.3 per cent year on year. In the third quarter, retail sales volume fell 19.5 per cent year on year, which the government said was almost on a par with the record decline in the third quarter of 1998 during the Asian financial crisis. Hong Kong eases monetary policy, banks to cut rates amid recession “Many retailers are considering shutting down shops when rental contracts expire, and some cash-strapped ones may be forced to close even before contract renewal,” Tse said. “As 100 restaurants went out of business in September and about 300 in October, I don’t think the retail sector can escape this fate.” Districts prone to the shutdown include Causeway Bay, a hotspot for protests, she added. Tse forecast the decline in retail sales would worsen in October, at the same magnitude as in August or even setting a new low. Tourist arrivals in the first 15 days of October were half what they were in the same period last year, the government warned. Tse urged landlords to share retailers’ burden by halving rents for six months but she said it was a call that still fell on many deaf ears. ‘Crazy night’ at party hub Lan Kwai Fong as sales slashed amid Halloween protests The government has offered more than HK$20 billion worth of relief measures for groups ranging from low-income families to small and medium-sized enterprises since August, but Tse said there was too little for retailers and it was too difficult to apply for. Hong Kong plunged into a recession for the first time since 2009, with the latest statistics showing gross domestic product contracted 3.2 per cent between July and September from the second quarter, which was down 0.4 per cent from the preceding quarter. A recession is defined as a decline in two consecutive quarters. Tourist arrivals to the city plunged 34.2 per cent in September year on year, with the biggest group of visitors – mainland Chinese, who account for 78 per cent of the total – down 35 per cent. All eyes will be on US President Donald Trump and his Chinese counterpart Xi Jinping over signing a deal to end the trade war that caught Hong Kong in the crossfire for more than a year.