HONG KONG — Retail sales in Hong Kong sank 10.5 percent in the first six months of the year, their deepest fall since 1999, as the industry struggles to replace the high-spending mainland Chinese tourists that once flocked to the city to do their shopping.
The drop in June continued a 16-month decline, the Hong Kong Retail Management Association said. By value, June retail sales shrunk 8.9 percent year-on-year to 33.7 billion Hong Kong dollars, marginally wider than the decline in May.
Department store goods sales for June lost 25.7 percent year-on-year while jewelry, timepieces and valuable gifts, once a staple on the shopping lists of mainland Chinese tourists, fell 20.4 percent. The cosmetics and medicine category was one of the few bright spots, growing 5 percent versus last year.
The continued industry slowdown has spurred a drop in rents in the city’s prime commercial districts and ushered in a shift from luxury label dominance to more affordable fast-fashion chains and sportswear stores.
The Hong Kong Retail Management Association added that while most of its members anticipated the downward trend to continue, they believed it would slow down in the second half thanks to better comparables.