Hong Kong’s retail sector continued on its downward trajectory in January and February, but industry insiders said they expect the decline to narrow and predicted a rise in the near future.

For the first two months of 2025 combined, the value of total retail sales decreased 7.8 percent compared with the same period in 2024, according to the Census and Statistics Department released on Monday.

The value of total retail sales in February 2025, dropped 13 percent year-on-year to HK$ 29.4 billion ($3.78 billion), and the value of total retail sales in January decreased 3.1 percent compared with a year earlier.

READ MORE: Hong Kong's retail sales fall 3.2% y-o-y in January

The year-on-year decline in the value of total retail sales in February 2025 widened, partly due to Chinese New Year (CNY) being in late January this year compared to mid-February last year, a government spokesman said.

The Census and Statistics Department said Hong Kong’s retail sales tend to show greater volatility in the first two months of the year depending on when Chinese New Year occurs, so it is more appropriate to combine the first two months in making year-on-year comparisons.

Of the total retail sales in February 2025, online sales accounted for 7.8 percent, with a value of HK$ 2.3 billion, and a 7.3 percent decrease year-on-year. However, for the first two months together, the value of online retail sales decreased 2.4 percent year-on-year.

In January and February, a notable decline in sales value was recorded for motor vehicles and parts, which fell 49.9 percent year-on-year.

Sales of food, alcoholic drinks and tobacco ran counter to the overall downward trend. On a yearly basis, the sales value of this category of products increased 0.7 percent in January and February.

“From the beginning of this year, Hong Kong began to hold some large-scale events, and these events can attract some high-quality guests, which gives me hope that the retail sector in 2025 will be better than last year,” said Leon Li, director of local wine shop Chill Wine.

READ MORE: Hong Kong November retail sales fall 7.3% in value

“More than half of our surveyed companies said that they anticipate the downward trend will narrow and even turn to an upward trend in March and April,” said Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association (HKRMA), said at a news conference on Monday.

A Hong Kong Special Administrative Region government spokesperson said the local retail sector will benefit from various measures introduced by the central government to boost consumption, proactive efforts to promote tourism and mega events by the HKSAR government, as well as sustained increases in employment earnings in the local labor market.

However, the spokesperson added that changes in consumption patterns of visitors and residents will remain a challenge for the retail sector.

Contact the writer at thor_wu@chinadailyhk.com