The ongoing citizen’s protests have continued to hurt retail sales in Hong Kong, and amidst a sharp drop in tourist traffic and subdued local consumption, government data released a few days ago revealed a sharp 18.3% drop in total retail sales during September 2019.

While the decline was lower than the 22.9% fall in August, it was still way above the 11.4% fall recorded in July, which at that time 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 September stood at HK$ 29.9 billion, the eighth consecutive month of y-o-y decline. In volume terms the fall was an even larger 20.4% during the month, the department reported, once again below the 25.2% reported in August, but far much more than the 13.1% decline in July, also a record decrease at that time.

Retail sales over the first nine months of the year are now down by 7.3% in value and by 8.3% in volume, the data showed.

Q3 retail sales by volume fell 19.5% year-on-year, almost the same as the record decline registered in the third quarter of 1998, the government said.

During the month of September, the sales of jewellery, watches, clocks and valuable gifts fell by a huge 40.8%, again slightly below the revised 47.1% drop reported in August. Other categories such as apparel and departmental stores reported declines of more than 25% as well.

The impact of the protests is further accentuated by the Sino-U.S. trade war and the slowdown in the Chinese economy. The bad news was compounded by an official announcement that the HK economy had also entered a technical recession, after GDP contracted in the third quarter, the second consecutive three-month period of decline.

Tourist traffic to the city dropped by 34.2% in September, with the fall in numbers from Mainland China touching 35%. Over the first nine months, tourist numbers are up by a marginal 0.2% overall and a mere 0.8% for visitors from the Mainland, who constitute about 80% of the overall footfalls from outside.

Government estimates place the decline in tourists during the first half of October at almost 50%.

According to a government spokesperson, “As protests involving violence continue to deter tourists and reduce local consumption, and the subdued economic outlook also dampens consumer sentiment, the performance of retail sales is likely to stay weak in the near term.”

The Hong Kong Retail Management Association (HKRMA) also said its members expect that the drop in retail sales value would be continued in November and December.