Hong Kong retail sales fall for a sixth straight month
Reuters
Hong Kong retail sales fell for the sixth straight month in August as a drop-off in tourist arrivals from mainland China and its economic slowdown took a bite out of the luxury goods business.
Retail sales slipped 5.4 percent from a year earlier to HK$37.9 billion ($4.89 billion). That followed a revised 2.9 percent fall in July, a 0.4 percent slide in June, 0.1 percent in May, 2.1 percent in April and 2.9 percent in March. In volume terms, August sales slipped 0.2 percent.
“This was in part due to the slowdown in inbound tourism, while the stock market gyrations of late might also have dented consumer sentiment,” the government said in a statement, adding that a later mid-Autumn festival this year also pushed back some sales.
“Outlook for retail sales is still subject to uncertainties, depending on the performance of inbound tourism and on whether there would be further negative impact from the recent heightened stock market volatility,” the government said.
On Wednesday, Financial Secretary John Tsang told Reuters that Hong Kong is looking at a “new normal” economic growth rate of 2-4 percent, about half the pace at which it grew in 2011.
HIGH RENTS HURT
Hong Kong’s comparatively high rents and wages have hurt companies as fewer mainland Chinese tourists have come to the city to buy handbags, watches and designer clothing.
Leather goods maker CoachPrada
Tourist arrivals from the mainland, which accounted for more than 80 percent of the visitors to Hong Kong in August, slipped 7.1 percent in the month from a year ago, according to Hong Kong Tourism Board data.
The strong Hong Kong dollar – which is pegged to the U.S. dollar – has made the city an expensive destination. China’s wealthiest tourists are also now looking to more exotic destinations.
August sales of jewellery, watches, clocks and valuable gifts were down 8.8 percent on a value basis. Clothing and footwear were down 12 percent on the same basis while food, alcohol and tobacco slid 10.2 percent.
The South China Morning Post reported on Friday a lacklustre first day to the Chinese Golden Week holiday. It quoted one retailer as saying sales were down as much as 70 percent from last year’s first day.
$1 = 7.7500 Hong Kong dollars
