It was a bad Chinese New Year for Hong Kong.
The Special Administrative Region’s retail sales tanked 20.6 percent in February to 37 billion Hong Kong dollars, or $4.8 billion at average exchange, Hong Kong’s Census and Statistics Department said Thursday. It is yet another piece of discouraging news for Hong Kong retailers, who are struggling as mainland Chinese tourists opt to bypass the city in favor of other shopping destinations such as Japan.
The government also revised sales figures for January. They slid 6.6 percent on the year, slightly worse than the 6.5 percent slide forecast earlier.
The census department reiterated the same cautious outlook it did when reporting its preliminary January figures earlier this month.
“The near-term outlook for retail sales will still be constrained by the weak inbound tourism performance and uncertain economic prospects. The Government will continue to monitor closely the retail sales performance and its repercussions on the wider economy and job market,” the government body said.
Given the fluctuating dates of the Chinese New Year holiday each year, the Hong Kong government said it makes the most sense to consider January and February sales combined in terms of a year-on-year comparison. Consumption tends to peak in the lead up to the holiday. Lunar New Year kicked off Feb. 8 this year but Feb. 19 last year. Hong Kong sales in January and February collectively declined by 13.6 percent on the year.
“Apart from the severe drag from the protracted slowdown in inbound tourism, the asset market consolidation might also have weighed on local consumption sentiment,” the government said.
In terms of categories over January and February combined, sales of jewelery, watches, clocks and valuable gifts decreased by 24.2 percent. Apparel sales slid 11.4 percent while that of medicines and cosmetics fell 7.7 percent.