Hong Kong October retail sales slump worst on record as protests take toll
Dec 2, 2019
Hong Kong’s retail sales in October fell by their steepest on record, as ongoing anti-government protests that have gripped the Chinese-ruled city for nearly six months scared off tourists and hit spending.
Retail sales in October fell 24.3% from a year earlier, government data showed on Monday, against a revised 18.2% drop in September and a 23% fall in August, as violent clashes spread across shopping districts and took a heavy toll on malls and restaurants.
Sales of jewellery, watches, clocks and valuable gifts plunged 42.9% on-year in October, data showed. Medicines and cosmetics fell 33.5%, while department store sales dropped 31.1%.
Hong Kong leader Carrie Lam renewed her appeals for peace in the Chinese-ruled city but failed to offer any concessions to anti-government protesters despite a resounding victory for pro-democracy parties in local elections.
Protests have sprung up on an almost daily basis since June, with crowds gathering with little notice, at times forcing the government, businesses, schools and even the international airport to close.
Market analysts say the outlook is overshadowed by the protests and a weak Chinese yuan that translates into weaker spending.
Retail operators, from prime shopping malls to family-run businesses, have been forced to close for multiple days over the past few months.
Retail sales fell to HK$30.1 billion ($3.85 billion) in October, a ninth consecutive month of decline. In volume terms, retail sales in October fell 26.2%, compared with a revised 20.3% drop in September.
“The local social incidents with increasing violence depressed consumption sentiment and severely disrupted tourism- and consumption-related activities,” a government spokesman said.
The government will monitor the implications for the labour market and the economy, he added.
Hong Kong sank into recession for the first time in a decade in the third quarter, as months of political protests plunged the city into its worst crisis since it reverted from British to Chinese rule in 1997.
Financial Secretary Paul Chan said on Monday the city could record a budget deficit in this financial year, the first in 15 years.
“The external environment is uncertain, the economic growth of major trading partners is expected to slow down, and the local social incidents are not yet ended. The damage caused is yet to be restored. Hong Kong’s economic prospects next year are full of challenges,” Chan said.
October tourist arrivals fell 43.7% on year to 3.31 million, according to the Hong Kong Tourism Board. They compared with a 34.2% drop in September.
The number of mainland visitors fell 45.9% in October, accounting for 76.1% of the total.
Many businesses have felt the pain, especially some of the city’s large luxury retailers who rely heavily on mainland Chinese spending, as the protests show no sign of easing.
The Hong Kong Retail Management Association has urged landlords to halve rents for six months, anticipating that some retailers may have to sack staff or even shut down.
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