Hong Kong’s retail sales shrank 23.1 per cent year on year in July, marking the 18th straight month of contraction, as the third wave of coronavirus infections continued to pummel the struggling sector.
Consumer spending dropped to HK$26.5 billion (US$3.4 billion) in July, contributing to the 32.1 per cent fall in sales for the first seven months of the year, from the same stretch in 2019, according to provisional figures released by the Census and Statistics Department on Tuesday.
Even though the contraction narrowed compared with previous months, Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, attributed the trend to low base figures in the second half of last year when sales slumped because of the months-long social unrest.
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“At that time, retail sales were already not so normal,” Tse said. “When we look at the sales value, there is no big improvement … I absolutely can’t say we have bottomed out.”
Most categories recorded a contraction compared to the same period last year, but supermarkets continued to outperform with a 26.5 per cent surge in sales in July. That followed increases of 4.5 per cent in June, 7.3 per cent in May, 14.4 per cent in April, 15.3 per cent in March, and 11.1 per cent in February and January combined.
Tse said residents were inclined to shop at supermarkets because of worries over wet markets after infection clusters were reported at some premises.
Given the outstanding performance, Tse voiced approval of the government’s decision to ask the privately owned ParknShop and Wellcome supermarket chains to provide discounts to residents if the companies wanted to join the second instalment of its HK$81 billion wage subsidy scheme, set up as a coronavirus relief measure.
“I support very much that these categories, which did not record a decline in business but saw sales increase, give back to society,” Tse said.
She urged the two firms – which each took more than HK$100 million in the first round of wage subsidies between June and August – to join its e-stamp promotion campaign, which was expected to be co-launched with the Quality Tourism Services Association next Tuesday to boost sales across the sector.
Under the plan, shoppers could earn an e-stamp through a mobile application when they spent HK$250 at any of the hundreds of retailers joining the platform. When shoppers had secured a designated amount of e-stamps, they could redeem gifts or discounts from retailers.
Tse suggested the supermarket giants donate some gifts for the scheme.
In a reply to the Post, ParknShop said it had initially discussed with non-government organisations ways to support those in need, and pointed out it already offered promotions on 2,000 items every week. It was still studying the request details from the government, it said.
ParknShop added the firm employed 8,200 workers and the scheme’s first tranche could only support 30 per cent of the wages involved, while it absorbed a majority of the increases in other costs. The Post has reached out to Wellcome for comment.
A government spokesman said that even with a lower base figure from last year for comparison, the decline in July’s retail sales remained notable because of the surge in local infection cases and the social-distancing measures that ensued.
“While the recent stabilisation in the local epidemic situation may help improve consumption sentiment, the business environment of the retail trade will continue to be very difficult in the near term as inbound tourism remains at a standstill,” he said.
Many retailers had expected a boost in business when millions of residents began receiving the government’s HK$10,000 cash payout.
But amid a resurgence of Covid-19 infections across the city, officials tightened social-distancing measures from mid-July, banning evening dine-in services at restaurants, limiting public gatherings to four people and then two, and resuming work-from-home arrangements for 170,000 civil servants. These sent the sector reeling again.
This article Coronavirus: Hong Kong retail sales drop 23.1 per cent but supermarkets buck trend again first appeared on South China Morning Post