Lower tourist arrivals on account of changes in the Labour Day holidays coupled with external uncertainties and still-cautious consumer consumption led to large drops in the retail sales of many product categories in Hong Kong during the month of April, according to figures released by the Census and Statistics Department of the HK government.

While sales of jewellery, watches, clocks and other valuable gifts dropped 11.4% year on year, other categories such as apparel, cosmetics, footwear, etc. also fell, driving a 4.5% decline in overall value of retail sales for the month as compared to a year earlier, the figures showed. In volume terms, there was a 5% y-o-y drop in retail sales during April 2019.

Retail sales across categories are now down 2% in value terms to HK 37.73 billion over the first four months of the year with a 2.3% dip in volume terms, figures released by the Hong Kong Retail Management Association (HKRMA) indicated.

A government spokesperson clarified that the Labour Day holidays in the Mainland (which fell in early May this year but straddled between April and May last year), led to a notable deceleration in the growth rate of visitor arrivals.

The outlook continues to be cautious, the government spokesperson noted. “In the near term, consumption sentiment will continue to be affected by various external uncertainties, though the sustained expansion in inbound tourism and the largely stable local labour market should provide support to retail sales business. The Government will closely monitor the situation.”

The HKRMA stated that the 2019 May Golden Week was a 4-day holiday in the Mainland, comparing to 3 days in 2018. Together with the opening of Hong Kong-Zhuhai-Macau Bridge and High Speed Rail, member companies observed strong tourist traffic during May Golden Week.

However, its member companies “forecast a flat to low single-digit increase in sales value for May Golden Week and for the whole month in May 2019”.