With pessimism prevailing, Hong Kong’s retail sector declined sharply by 14.7 percent year-on-year in April, according to official data released on Friday.

The provisional estimate of the value of total retail sales in April was HK$29.6 billion ($3.8 billion), the Census and Statistics Department said.

Online sales accounted for 8.2 percent of total retail sales in April, with a provisionally estimated value of HK$2.4 billion, recording a year-on-year increase of 11.4 percent. However, the online retail sales of the first four months in total dropped by 5.8 percent year-on-year

For the first four months of 2024 taken together, it was provisionally estimated that the value of total retail sales decreased by 4.7 percent compared with the same period in 2023.

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A government spokesman said that the Easter holidays, the unstable weather and relatively high base of comparison are all factors relevant to the significant fall in April.

Online sales accounted for 8.2 percent of total retail sales in April, with a provisionally estimated value of HK$2.4 billion, recording a year-on-year increase of 11.4 percent. However, the online retail sales of the first four months in total dropped by 5.8 percent year-on-year.

The automobile market ran counter to the downward trend. On a yearly basis, the sales value of motor vehicles and parts surged by percent 58.5 percent in April, due to the Hong Kong SAR government’s preferential policies for e-vehicles. A notable decline in sales value was recorded in jewelry, watches and clocks, and valuable gifts, which fell by 28.7 percent year-on-year.

“Looking ahead, the changing consumption patterns of visitors and residents would continue to present challenges to the retail sector,” the spokesperson said.

In May and June, more than half of surveyed members reported a negative attitude in the industry, Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association (HKRMA) said on Friday.

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“Retailers welcome the mega events held by Hong Kong Special Administrative Region government and the expansion of the individual travel scheme approved by central government,” she added. But the industry insiders said more subsidies were needed from the Hong Kong government for participating in mega events and said they hoped the central government would increase duty-free allowances for tourists visiting Hong Kong.

The duty-free allowance for tourists visiting Hong Kong is 5,000 yuan (HK$5,400) per trip per person, which has not changed since 1996.

“For the retailers, high rents and employee salaries are the main costs that cannot be changed in the short-term,” said Bond Law, executive director of the HKRMA. “Besides, we will face many questions in the future, so we cannot forecast when the sector will start to grow again growth, compared with the same period last year.”

Contact the writer at thor_wu@chinadailyhk.com