Retail
sales for September grew at the fastest pace in over two years, boosting market
sentiment in the run-up to the festive season. Sales increased 5.6% by value
and 5.5% by volume year on year, marking the seventh month of consecutive
growth. Jewelry, watches, clocks and valuable gifts performed well, with sales
value rising 14.7% in the third consecutive month of growth for this segment —
a big jump from the 7.3% increase in August. The category’s total sales for the
first nine months of 2017 were up 4.3% year on year, while overall retail
volume for the same period saw a 0.9% rise.
The numbers reflect the
upbeat consumer sentiment and continued improvement in inbound tourism to the
city, a government spokesman said. “The performance of retail sales in the near
term should continue to be bolstered by the prevailing favorable job and income
situation, as well as the recovery in inbound tourism.”
Thompson Cheng, chairman of
the Hong Kong Retail Management Association (HKRMA), predicted sales values for
October would grow approximately 4%, with a 3%-4% rise over the next year.
“Consumer sentiment is always tied to the performance of the economy,” he said.
“If the property and stock markets remain stable, then the retail sector looks
certain to grow, as people are more willing to spend in buoyant times.”
Bespoke
feeling ‘beleaguered’
Two
local jewelers that offer bespoke services primarily to the expatriate
community were slightly more cautious in their outlook for the holiday season.
Sally Ryder, founder and
designer at Ryder Diamonds, said business was off to a slow start in November,
but starting to pick up. “People are putting off purchasing until the new year.
It seems the financial industry sentiment is a little nervous.”
David Nazer, managing
director of Haywards, reported “fairly beleaguered” sentiment among the city’s
diamond traders. “Prices for D-color and IF-clarity have taken a battering, so
we have clients more interested in higher-quality goods, which are perceived as
being more affordable,” he said.
Retail
recovery
Recent
results from two of Hong Kong’s large jewelry chains pointed to an ongoing
recovery in the Greater China market.
Chow Tai Fook reported a 15%
increase in Mainland China sales and a 12% rise in Hong Kong and Macau for its
second fiscal quarter — which ended September 30 — compared to the same period
last year. Same-store sales grew 9% on the mainland and 13% in Hong Kong and
Macau, with gold products performing particularly well in both markets. Sales
of gem-set jewelry slid 1% in China, but jumped 7% year on year in Hong Kong
and Macau — following 13 quarters of consecutive decline since the first
quarter of fiscal 2015. Chow Tai Fook attributed the improvement to the
“remarkable volume growth” during the quarter.
Rival retail jeweler Luk Fook
recorded growth of 17% in its overall same-store sales and a 16% rise in sales
of gem-set jewelry for the same quarter. Same-store sales were up 11% in total
for Mainland China and 18% for Hong Kong and Macau, while gem-set jewelry fell
2% in China but rose 18% in Hong Kong and Macau.
Retailer Tse Sui Luen (TSL)
Jewellery, meanwhile, saw its net earnings jump 48.9% in the six months that
ended August 31, compared with the same period in 2016. Sales in Mainland China
accounted for 62% of its total turnover, and sales volume from its e-commerce
initiatives rose 33.3% year on year.
Article from the Rapaport Magazine - December 2017. To subscribe click here.