Retail sales in Hong Kong fell by a massive 21.4% in January 2020, the 12th consecutive month of decline, as the coronavirus outbreak combined with the effects of months of street protests, impacted consumer sentiment locally and led to a further drop in tourist arrivals.

Amidst the fears sparked by the spread of the disease in Mainland China, and subsequently to other parts of the world, even the Lunar New Year holiday season, normally a peak period for the retail trade, was totally lacklustre.   

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. This is also now the longest unbroken period of decline since a prolonged slump in retail sales between 2015-17.

Data released recently by the HK Census and Statistics Department indicated that retail sales volumes were down by 23%, significantly higher than the 13.1% decline in July, also a record decrease at that time.

Government statistics show that retail sales across all categories during the month of January 2020 stood at HK$ 37.7 billion.

During the month of January, the sales of jewellery, watches, clocks and valuable gifts fell by a huge 41.6%, slightly lower than 43.5% drop reported in November. Other categories such as electric and other consumer goods (-20.4%), apparel (-28.9%), commodities in departmental stores (-27.0%) and medicines and cosmetics (-32.3%) also witnessed dramatic drops.

Tourist traffic to the city was down by 52.7% in January, just below the 55.5% fall in November 2019 which was the steepest decline since the SARS epidemic in 2003. The decline in numbers from Mainland China, which accounts for nearly 80% of the overall footfalls from outside, was 54.2%.

A government release pointed out that the year-on-year comparison may not present a complete picture as the Lunar New Year which fell in January this year, was in February last year.

However, government spokespersons have also noted that the situation is likely to have worsened in February, as the spread of the coronavirus has brought inward tourist arrivals to a virtual halt and disrupted consumer purchases and consumption related activities.

The Hong Kong Retail Management Association (HKRMA) said that its member companies remain pessimistic about the sales performance for February and March 2020, as it hinges on the development of this global public health emergency. The trade body forecasts that the total retail sales value for the first half of 2020 would decrease by mid double digits, ranging from -30% to -50%, with certain categories declining even worse than the average.