default-output-block.skip-main
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Hong Kong Retail Sales Drop for the First Time in Two Years

Consumer spending traditionally surges before the Lunar New Year holidays, but this year much of that was done in January due to the holiday's earlier start date of February 5.
Causeway Bay, Hong Kong | Source: Shutterstock
By
  • Reuters

HONG KONG, China — Hong Kong's retail sales fell in February, ending a 23-month expansion streak, government data showed on Monday, and the total for 2019's first two months was less than a year earlier as economic uncertainties kept consumers cautious.

Consumer spending traditionally surges before the Lunar New Year holidays, but this year much of that was done in January, as the holiday began on February 5. In 2018, the holiday began February 16, so the shopping spree was the first half of the month.

Hong Kong consumers have become increasingly cautious amid protracted US-China trade tensions, while a weaker Chinese yuan has also made the city an expensive place to shop.

Retail sales fell 10.1 percent from a year earlier to HK$40.7 billion ($5.18 billion), compared with a revised 7.0 percent rise in January.

For the first two months of 2019, total retail sales fell 1.6 percent in value terms and 1.8 percent by volume.

Analysts combine January and February figures for a more accurate trend to account for distortions from the timing of Lunar New Year.

"The weak performance of retail sales in recent months reflected that consumption sentiment remained cautious amid various external uncertainties," a government spokesman said.

Sales "should continue to be affected by moderating global economic growth," he said.

Feeling a Chill

Analysts say Hong Kong's retailers have started to feel the chill from China's slowdown and the US-Sino trade war.

Cosmetic chain Sa Sa said its Hong Kong retail sales during February 5-11 were down 5 percent compared with the first seven days of Lunar New Year in 2018.

"Overall performance was weaker than expected," said Sa Sa chairman Simon Kwok. While there was a big rise in the number of Chinese visitors during February 4-10, they were "more reserved in shopping", he said.

February tourist arrivals rose 5.8 percent from a year earlier to 5.59 million, according to the Hong Kong Tourism Board. Mainland visitors increased 3.7 percent and were 81.6 percent of the total.

Sales of jewellery, watches, clocks and valuable gifts decreased 9.7 percent in February, data showed, after a revised 4.1 percent increase in January.

Department store sales fell 6.1 percent in February against a 15.1 percent rise in January.

PwC said it expects Hong Kong retail sales to shrink 3 percent this year, and the Hong Kong Retail Management Association expects low single-digit growth.

By Donny Kwok and Twinnie Siu; editor: Richard Borsuk.

In This Article
Topics
Location

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from Retail
Analysis and advice from the front lines of the retail transformation.

In an era of austerity on Wall Street, apparel businesses are more likely to be valued on their profits rather than sales, which usually means lower payouts for founders and investors. That is, if they can find a buyer in the first place.


The fast fashion giant occupies a shrinking middle ground between Shein and Zara. New CEO Daniel Ervér can lay out the path forward when the company reports quarterly results this week.



The sportswear giant posted flat sales in its latest quarterly report, beating Wall Street expectations. To fully recover, the business must demonstrate greater product innovation, analysts say.


view more

Subscribe to the BoF Daily Digest

The essential daily round-up of fashion news, analysis, and breaking news alerts.

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
BoF Professional - How to Turn Data Into Meaningful Customer Connections
© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions, Privacy Policy, Cookie Policy and Accessibility Statement.
BoF Professional - How to Turn Data Into Meaningful Customer Connections