Hong Kong retail sales plunged 13.1 per cent year on year in August, as the coronavirus pandemic continued to batter the struggling sector, marking a 19th consecutive month of contraction.
Consumer spending dropped to HK$25.6 billion (US$3.2 billion) in August, contributing to sales for the first eight months of the year falling 30 per cent from the same stretch in 2019, according to provisional figures released by the Census and Statistics Department on Wednesday.
Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.
The monthly year-on-year decline was not as steep as recorded recently, but that was mainly attributed to the data comparison with last August, when the city was gripped by anti-government protests.
“I hope everyone can understand that and won’t be misled by the figure,” said Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, adding this August’s slump reflected a serious situation for the industry.
The total value of retail sales in the city between January and August this year was HK$213 billion, compared with HK$305 billion for the same period last year.
Most retailers continued to suffer a contraction in sales in August, with supermarkets once again among the exceptions, a trend Tse linked with residents staying in to cook during the city’s third wave of Covid-19.
All eyes are on how retail businesses perform between October 1 and October 4, which is traditionally a peak period for sales because of the National Day holidays, popularly known as “golden week”.
Previously, millions of mainland Chinese would travel domestically and overseas during the break, but would be kept away from Hong Kong this year by the city’s travel restrictions for the pandemic.
Tse noted that sales might improve for those selling goods relating to people’s daily lives, such as furniture and food, due to the long weekend in Hong Kong overlapping with the Mid-Autumn Festival.
“But everyone predicts it will help boost the footfall rather than sales. Maybe due to the ease of pandemic, then the foot traffic in general will be better ... the sales will still remain weak,” she said.
“The help for sectors which had continued to record a decline in sales would be minimal.”
A government spokesman said as economic conditions remained under pressure and inbound tourism was unlikely to recover in the short term, the business environment would continue to be difficult.
“Nonetheless, local consumption sentiment may further improve if the recent stabilisation of the local epidemic situation sustains,” he said.
After the third wave of infections intensified in July, evening dine-in services were banned in Hong Kong restaurants for nearly 1½ months, only reopening in late August.
Most entertainment premises such as bars and karaoke lounges also remained closed in August, dampening consumer sentiment across the city.
The ongoing global lockdown also played a role in subdued consumption, as tourist arrivals to the city collapsed 99.9 per cent, with fewer than 4,500 people in August.
More from South China Morning Post:
- Club 71, go-to bar for artists, activists and creatives in Hong Kong, to close – killed off by the coronavirus pandemic
- Hong Kong-mainland China border could reopen soon as city seeks to recover from Covid-19
This article Hong Kong retail sales drop 13 per cent in August, continuing 19-month downward spiral first appeared on South China Morning Post