In Markets

Hong Kong 2016 retail sales worst drop in two decades

Hong Kong‘s retail sales shrank for the third year in a row in 2016 and by the most in nearly two decades, hurt by the city’s economic downturn and fewer tourists from mainland China.

The prolonged slump in the once-flourishing retail industry may be bottoming out, but analysts say it is too early to call for a recovery yet as store closures and lay-offs continue.

In December, retail sales value slid for the 22nd straight month, down 2.9 percent from a year earlier to HK$42.4 billion. That compared with a revised 5.4 percent fall in November.

SEE ALSO: Hong Kong braces for tourism as China visitors stay away

A narrower decline in December reflected a revival in visitor arrivals, the government said.

In volume terms, December sales fell 2.8 percent from a year earlier.

Hong Kong, once a favourite shopping destination for mainland Chinese, has been facing greater competition from Japan and South Korea. Hong Kong’s simmering political tensions with China and a strong local dollar – pegged to the U.S. currency – have added to retailers’ frustrations.

The city’s retailers have scaled back expansion and are moving out of expensive shopping districts to cope with hard times.

TOURISM SLUMPS

Total visitor arrivals fell 4.5 percent to 56.65 million in 2016, of which mainland visitors dropped 6.7 percent to 42.78 million.

“So we are seeing an increase in tourist arrivals starting from the last quarter of last year and it carried on through December to January,” said Gregory So, Secretary for Commerce and Economic Development, but added it was premature to predict any trends.

(Source: Fashion Network)

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