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Protests Dent Hong Kong Retail Outlook
Jul 3, 2019 5:18 AM
By Rapaport News
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RAPAPORT... Retail sales in Hong Kong
are set to fall by 5% in 2019, with the decline expected to be even sharper in
the luxury-goods market, which includes jewelry.
The new estimate, published
last week by PricewaterhouseCoopers (PwC), is a downgrade on its previous
forecast. The advisory firm had anticipated that Hong Kong’s retail sales would
dip by 3%.
Reasons cited for the lower forecast
include the US-China trade war and ongoing protests in the region, which have
contributed to dwindling tourism from mainland China.
“The recent political and social unrest,
temporary closure of the Peak Tram due to renovations, coupled with a lack of
new tourist attractions might lower mainland tourists’ appetite to visit Hong
Kong in the short term,” said Michael Cheng, PwC’s consumer-markets leader for Asia
Pacific, Hong Kong and China. “Meanwhile, a weakening economy as well as
uncertainty surrounding the trade dispute present risks to the outlook in the
medium to longer run.”
PwC’s estimates mirror the retail
results the Hong Kong government’s Census and Statistics Department published earlier
Tuesday.
Sales for jewelry
and other luxury items remained sluggish in the municipality last month,
despite a boost in tourism over the Labor Day holiday period at the start of
the month. While some retail categories saw modest increases, jewelry and other
luxury items did not improve.
Revenue from jewelry, watches, clocks
and other valuable gifts fell 2.7% year on year to HKD 6.7 billion ($858.9
million) in May, compared with the same month in 2018, according to the report. Total retail sales slipped 1.3% to HKD 39.97 billion ($5.13 billion).
Tourists from mainland China typically travel
to Hong Kong to purchase luxury goods during the Labor Day holiday period,
which this year ran from May 1 to 4. But while the city saw 4.7 million
mainland visitors in May, a 24% year-on-year increase, this did not translate
to an uplift in the sales of luxury items.
The retail performance in Hong Kong has
remained subdued in recent months, and the “outlook for retail sales will
likely be clouded by the still-cautious [consumer] sentiment amid an uncertain
global economic environment,” a government
spokesperson said.
For the first five months of
2019, retail sales of jewelry, watches, clocks and other valuable gifts
decreased 4.4% year on year to HKD 34.88 billion ($4.47 billion). Overall
retail sales fell 1.8% to HKD 206.1 billion
($26.44 billion).
Image: Retail stores in Hong Kong. (Another Believer)
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Tags:
asia, China, Hong Kong, Labor Day, mainland china, Michael Cheng, PricewaterhouseCoopers, pwc, Rapaport News, retail
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