Retail sales in Hong Kong plunged by a massive 44% in value terms in February 2020, the steepest ever fall on record as the global novel coronavirus pandemic severely impacted consumer sentiment locally and brought tourist arrivals to a near total standstill.

Data released recently by the HK Census and Statistics Department indicated that retail sales volumes for the month were down by 46.7%. The decline in February was nearly double the 21.5% and 23.1% drops in value and volume terms respectively, recorded in January 2020.

This was the 13th consecutive month of decline, as the health crisis, now in its second wave, had earlier been preceded by many months of street protests. Government statistics show that retail sales across all categories during the month of February 2020 totalled just HK$22.74 billion, less than half of the HK$48.08 billion recorded in January 2019.

Moreover, for the first two months of 2020 taken together, total retail sales decreased by 31.8% in value and 33.9% in volume compared with the same period in 2019. This gives a more accurate overview of the impact on sales as the Lunar New Year fell on January 25 this year as against February 5 last year.

Over Jan-Feb 2020, the sales of jewellery, watches, clocks and valuable gifts fell by a huge 58.6%, much above the previous highest monthly drop of 43.5% reported in November. Other categories such as electric and other consumer goods (-25.1%), apparel (-49.9%), electrical goods and other consumer durables (-25.1%) and medicines and cosmetics (-42.7%) also witnessed dramatic drops over the two-month period.

Tourist traffic to the city was down by 96.4% in February (-72.5% for Jan-Feb 2020), well above 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 97.8% for February (-73.9% for Jan-Feb).

A Hong Kong government spokesperson noted, “The business environment of retail trade will remain extremely austere in the near term, as the Covid-19 pandemic has brought inbound tourism to a standstill and severely dented local consumption demand.”

The Hong Kong Retail Management Association (HKRMA) said that its member companies expected the sales performance in March to be similar to February, with a drop in the total retail sales value from -30% to -40%

The trade body maintains it earlier 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.