Social Protests, Trade Tensions Cause HK Retail Sales to Dip 11% in July; Jewellery Sales Decline 24%
The ongoing citizen’s protests in Hong Kong, including some cases of violence, couple with the continuation of US-Mainland China trade tensions had a significant impact on local consumer sentiment leading to a steep 11.4% drop in total retail sales in July 2019, according to data released by the HK government last week.
This was the steepest monthly drop in more than three years.
According to the HK Census and Statistics Department, retail sales across all categories during the month of July stood at HK$ 34.4 billion, the sixth consecutive month of y-o-y decline. In volume terms the fall was an even larger 13% during the month, the department reported.
A statement issued by the government noted that the figures were a reflection of “weak local consumer sentiment and significant disruptions to inbound tourism and consumption-related activities arising from the recent local social incidents”.
The spokesperson added that it was expected that Hong Kong retail sales will likely stay weak in the near term, as US-Mainland trade tensions escalated, and along with subdued economic conditions, “continued to dampen consumer sentiment”.
According to the government, “The situation may even deteriorate further if the social incidents involving violence do not come to a stop.”
Sales of jewellery, watches, clocks and other valuable gifts, the largest category in the basket, registered the biggest fall in July, down by 24.4% year on year, and other categories such as apparel, motor vehicles, electrical goods, etc. also fell significantly.
Government figures also revealed a drop in tourist arrivals – overall 4.8% lower year-on-year in July, led by a 5.5% decline in the number of visitors from the Mainland.
Total retail sales across all categories are now down 3.8% in value terms over the first seven months of the year with a 4.4% dip in volume terms, figures collated by the Hong Kong Retail Management Association (HKRMA) indicated.
The association also stated that its members felt that due to continued drop in visitor number and further dampened local consumption sentiment, the percentage drop in sales value in August would be even higher than that in July. Early reports say that in August, some member companies reported a drop of 50% or more in sales value for shops located in tourist areas, while a range of 20% - 30% drop in sales value for shops in other areas.