Hong Kong’s retail sales could decline by 17 percent throughout
the year even if the coronavirus crisis eases in July, an industry analyst said
on Thursday.
The upcoming Labour Day Holiday is likely to see the city’s retail industry remain stagnant without major buyers from the Chinese mainland. Same-store sales of jewelry and cosmetics may fall 60 percent in May, predicted Mavis Hui, Hong Kong and Chinese mainland consumer sector analyst at DBS Bank Hong Kong.
Hui expects retail sales from April to June will fall 30 percent but may experience a slight rebound in the fourth quarter of the year. However, she warned that if the social unrest continues in Hong Kong, tourists might turn to Macao for their shopping
Hong Kong’s retail market is unlikely to rebound sharply in the
short term, Hui told a video conference. Although sales of food and sanitary
products have risen, the general performance of retail sales will be
mediocre due to the city’s pandemic restrictions, she added.
Hui expects retail sales from April to June will fall 30 percent
but may experience a slight rebound in the fourth quarter of the year. However,
she warned that if the social unrest continues in Hong Kong, tourists might
turn to Macao for their shopping.
Hong Kong’s retail sales have suffered from a lackluster
performance for 13 months. Since January 2019 - sales fell from HK$48.1 billion
to HK$22.7 billion - a loss of more than 50 percent. The social unrest which
began last year, and this year’s coronavirus pandemic have devastated an
already battered industry.
The special administrative government has rolled out relief
packages which amounted to HK$290 billion to help Hong Kong people cope - such
as subsidizing employees’ salaries.
Hui said the relief package is good news for retailers, but may only offer
businesses limited help.
As mainland residents can now enjoy domestic traveling, Hui believes retailers who have businesses on the mainland may see some recovery in trade.
A recent survey on the impact of the pandemic on Hong Kong’s
retail industry conducted by the Hong Kong Retail Management Association
predicted that from February to May, 10,400 retail staff will lose their jobs.
A total of 6,600 shops will close down and to stay operating from May to
August.
Covering the last day of March until April 9, the survey covered
152 retail companies. Of these, 40 percent said their ability to stay operating
could last for four months - at the most.
Annie Tse Yau On-yee, chairwoman of the HKRMA, said the government
relief package might ease some of the burdens facing retailers, but other shops
had closed down before they could get the subsidies.
She reiterated that rents are the biggest problem facing retailers
and appealed to landlords to offer rent reductions of at least 75 percent to
help businesses survive.
