Hong Kong retail sales plunged by a third in the first half of 2020 from the same period last year as the coronavirus crisis devastated the sector.
Consumer spending in June stood at HK$26.5 billion (US$3.4 billion), according to provisional figures the Census and Statistics Department released on Thursday, shrinking 24.8 per cent year-on-year to mark the 17th straight month of decline.
Even though last month’s performance reflected an improvement on the 32.9 per cent recorded in May, the drop contributed to the retail sector suffering a 33.3 per cent slump in sales for the first six months of this year from the equivalent period in 2019.
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A government spokesman said the rate of fall in June slowed as the epidemic abated that month, but he warned the industry was facing renewed challenges as the public health crisis worsened.
“With inbound tourism remaining at a standstill and local consumption hit by the surge in local Covid-19 cases in July and the resultant tightening of social-distancing measures, the operating environment for the retail trade has turned more austere again,” he said.
Retail sales were worth HK$160.8 billion over the first half of 2020, down from the corresponding 2019 figure of HK$241.3 billion.
But even greater uncertainty hangs over the sector as the city battles its most severe wave of Covid-19 infections.
“Most of our members told us the slump in the second week of July was quite drastic,” said Annie Tse Yau On-yee, Hong Kong Retail Management Association chairwoman, referring to the resurgence of cases under the city’s third wave of infections.
“It greatly reduced the [positive] effect brought by the government’s cash payout scheme which gives [eligible] residents HK$10,000 each.”
Tse said some members saw sales halve, or even worse, in the second week of July compared with the preceding week.
On the outlook for the third quarter, she said many expected to see slump of a similar magnitude experienced in July.
This month officials have scrambled to tighten social-distancing measures and rolled out some of the toughest measures so far to contain the fresh wave of infections.
Dine-in services at restaurants were banned in the evening, while the limit for public gatherings was cut from 50 people to four and then to two within weeks.
This week, the government imposed an all-day ban on eating in restaurants from Wednesday, only for the decision to be reversed following a public backlash, allowing dine-in services between 5am and 6pm from Friday.
On Thursday, the city registered a triple-digit rise of Covid-19 cases for the ninth day running pushing its total to 3,151.
Citing a recent survey of 21 companies, covering more than 2,000 outlets across the city, Tse said more than 60 per cent of those firms planned to suspend operations at some of their stores.
Nearly half said they would shut down some outlets and a proportion of those would start to do so in July or August.
She said most of the members could still not secure rent relief from landlords despite repeated appeals from the retail management association.
Tse said they wanted to remain on friendly terms with property owners so had not published a blacklist of landlords who refused to reduce costs for commercial tenants.
“We will look at the situation to see how things will develop. If we can’t bear fruits after our recent appeal, we won’t rule out making the list public,” she said.
If there was a fourth wave of infections and landlords still dismissed pleas to roll out concessions, Tse warned of widespread retail closures once the government’s employment support scheme ended this year.
More from South China Morning Post:
- Hong Kong’s coronavirus-ravaged economy shrinks 9 per cent in second quarter
- Coronavirus: Hong Kong retail sales still falling but April figures offer signs of hope