Coronavirus: Hong Kong retail sales still falling but April figures offer signs of hope

The damage caused by the Covid-19 pandemic to Hong Kong’s retail sector showed signs of easing in April, with the value of retail sales dropping 36.1 per cent year on year, a slight improvement from the 42.1 per cent year-on-year contraction in March.

But the sector still marked its 15th consecutive month of contraction in April, according to provisional figures released on Monday by the Census and Statistics Department, while the city’s retail management association has warned of a “very challenging time” in June.

The values of total retail sales in April and March were HK$24.1 billion (US$3.1 billion) and HK$23 billion respectively. By volume, retail sales dropped 37.5 per cent year on year in April, compared with 44 per cent year on year in March.

In the first four months of the year, spending in dollar terms fell 35.3 per cent from the same period last year to HK$107.55 billion.

A government spokesman said: “The year-on-year decline in retail sales remained huge in April, though narrower than that in March, reflecting severe disruptions caused by the pandemic and its containment measures.”

He added that the business environment for retail trade remained challenging, as the pandemic had brought inbound tourism to a halt, and austere labour market conditions and various uncertainties continued to weigh on consumption sentiment.

Hong Kong Retail Management Association chairwoman Annie Tse Yau On-yee said: “The narrowing down of decline in April could be because people were forced to cancel their overseas trips during Easter and remain in the city amid the Covid-19 shutdown.”

She also expected a “very challenging” time in June amid signs of a resurgence of anti-government protests.

The association urged the city’s landlords and developers to cut retailers’ rents by up to 75 per cent for at least six months to help them survive the recession.

Hong Kong retail sales in record 44 per cent decline as health crisis batters struggling sector

Tse said the rent discount that landlords and developers had earlier offered was not enough to cover losses and support operations.

She also urged the government to take a cue from Singapore and introduce regulations to restrict landlords from taking legal action against retailers who had been unable to pay rent for at least nine months.

The Hong Kong government rolled out a series of travel curbs and social-distancing measures to contain the spread of the coronavirus after the pandemic hit the city in January.

The measures included closing all but three border checkpoints, suspending classes in schools and asking civil servants and private sector employees to work from home.

In March, the government expanded mandatory quarantine measures to all international arrivals, while air entry by non-residents was barred entirely except for those from mainland China, Macau and Taiwan.

Tourist arrivals in Hong Kong collapsed in March to 82,000, down 99 per cent year on year. In April, the number fell further to 4,125.