Retail sales in Hong Kong continued their slump during December 2019, dropping by 19.4% year-on-year, to bring to a close what has been a tumultuous year for the city. Data released recently by the HK Census and Statistics Department indicated a 11.1% drop in retail sales during the 12-month period ended December 31, 2019, including a whopping 24.1% fall in Q4, which is the largest quarterly decline on record.

To put these figures in perspective – a 11.4% fall in sales recorded in July was at that time reported to be the steepest monthly drop in more than three years.

Sales have now contracted for eleven consecutive months, battered by sharp falls in tourist traffic as well as depressed consumer sentiment, both closely related to the ongoing protests that have even seen incidents of violence and clashes with the police, and seriously impacted shopping during the Christmas holiday season.

Government statistics show that retail sales across all categories during the month of December 2019 stood at HK$ 36.2 billion. In volume terms the fall was even bigger, 21% during the month, the department reported, once again below the 26.2% reported in October, but significantly above the 13.1% decline in July, also a record decrease at that time.

Retail sales for the year were down by 11.1% in value to HK$ 431.2 billion and by 12.3% in volume, the data showed.

During the month of December, the sales of jewellery, watches, clocks and valuable gifts fell by a huge 36.7%, slightly lower than 43.5% drop reported in November. Other categories such as electric and other consumer goods (-17.4%), apparel (-22.1%), commodities in departmental stores (-25.3%) and medicines and cosmetics (-29.9%) also witnessed dramatic drops.

The impact of the protests was further accentuated by the uncertainty associated with the Sino-U.S. trade war and though a preliminary agreement was reached in mid-December, uncertainty persists. Coupled with this, the slowdown in the Chinese economy has pushed the local economy into a recessionary phase in recent months.

A report published in December by the Hong Kong Retail Management Association estimates that 7,000 of the territory’s 64,000 retail locations will be forced to shut down in the first half of 2020. The HKRMA said that 97% of those surveyed reported that they had experienced financial losses since the beginning of the protests, and 57% said the drops had been severe.

Tourist traffic to the city was down by 51.5% in December, just below the 55.5% fall in the previous month which was the steepest decline since the SARS epidemic in 2003. The decline in numbers from Mainland China was 53.2%. During 2019, tourist numbers are down by 14.2% overall and 14.2% for visitors from the Mainland, who constitute nearly 80% of the overall footfalls from outside.

The current coronavirus crisis will further accentuate the troubles of retailers in the city, retailers fear.

“The business environment for retail trade has become even more difficult recently, with the threat of the novel coronavirus infection heavily weighing on inbound tourism and local consumption sentiment,” a spokesperson of the government said.