It was not a very merry Christmas for Hong Kong retailers.
Hong Kong’s retail sales in December declined 8.5 percent to 43.7 billion Hong Kong dollars, or $5.6 billion, according to Hong Kong’s Census and Statistics Department. It was already shaping up to be a poor holiday season as November sales slid 7.8 percent.
Specifically, sales of jewelry, watches, clocks and valuable gifts fell 17 percent while that of apparel fell 12.1 percent for the month, according to the government-run organization.
Retailers had been bracing for a rough end to the year as Chinese tourist flows, once a boon to the city’s economy, have slowed. Increasingly, Chinese tourists are opting for destinations like Europe, Japan and the United States over Hong Kong when it comes to shopping trips. That said, the momentum of their spending appears to be waning. The growth in shopping expenditures by Chinese shoppers worldwide slowed to 16 percent in December, down from 42 percent growth in November, according to data from Global Blue.
The slump in the latter part of the year dragged down full-year 2015 retail sales figures in Hong Kong. They slid 3.7 percent to 475.2 billon Hong Kong dollars, or $60.95 billion, according to the Hong Kong government.
“Apart from the continued slowdown in inbound tourism, the uncertain economic outlook and asset market corrections may also have dented local consumption sentiment,” the statistics department said.
The downward pressures on retail sales in Hong Kong are set to continue, according to the government body. Its less-than-upbeat forecast comes just ahead of Chinese New Year, which kicks off early next week.
“Looking ahead, the near-term outlook for retail sales will still be constrained by the weak performance of inbound tourism. The negative spillovers on consumer sentiment from the consolidation of asset markets in recent periods, as well as from external headwinds…need to be closely watched,” the organization said. “The [Hong Kong government] will continue to monitor the performance of retail business and its repercussions on the wider economy and the job market.