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 Growth Slowed Again in July

Pedestrians wait to cross a road in front of the Cheung Kong Centre building in the Central district of Hong Kong, China. Getty Images.
Pedestrians wait to cross a road in front of the Cheung Kong Centre building in the Central district of Hong Kong, China. Getty Images.

Hong Kong’s retailers saw consumption growth slow more than expected in July as social distancing measures to control the virus continued to constrain spending and local shoppers awaited the arrival of electronic vouchers the following month.

Retail sales value was $27.2 billion Hong Kong Dollars ($3.5 billion), up 2.9 percent from a year ago, according to a government report. That’s well short of the median economists’ forecast for 10% growth. Retail sales volume rose 0.9 percent, also short of expectations for a 6.9 percent advance.

“The electronic consumption vouchers that the government began to disburse in August have helped stimulate consumption sentiment and will render support to the retail business in the rest of the year,” the report said. Consumption in the city continued to increase at a more moderate rate as the local virus situation remained stable and labor conditions improved, the report said.

Hong Kong’s economy is gradually recovering from its historic two-year recession thanks to a resilient financial services industry, surging real estate prices and rebounding trade. At the same time, retail consumption is still severely hampered by Covid-19 border restrictions that have cut off tourism spending.

The city’s population has also been falling at a record pace over the past 12 months as people left in the wake of the pandemic and national security law.

The Hong Kong government raised its growth forecast for 2021 to a range of 5.5 percent to 6.5 percent earlier this month as it began distributing $5,000 HKD ($643) consumption vouchers to eligible residents to encourage spending. The program will cost an estimated $36 billion HKD and provide a 0.7 percentage-point bump to economic growth for the year, according to an April government report. The economy grew 7.6 percent on an annual basis in the second quarter.

By Eric Lam

Learn more:

Is This the End of Hong Kong as a Luxury Mecca?

As protests re-start in a city that was once one of the world’s most important luxury and retail hubs, businesses have never faced more uncertainty.

In This Article

© 2021 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
The BoF Sustainability Masterclass Series
© 2022 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions and Privacy policy.
The BoF Sustainability Masterclass Series