HONG KONG— Mainland Chinese visitor numbers to Hong Kong leapt 18 percent over the recent Christmas weekend but that jump didn’t translate into a sales bonanza, according to local retailers. Initial feedback has been mixed, with some stores expecting flat sales and others reporting declines as they conclude another lackluster year of trading.
“In general, Christmas business is meeting expectations and I do think the retail business of December would be very close to last year’s level if not slightly better,” said Thomson Cheng, chairman of the Hong Kong Retail Management Association.
Jewelry retailer TSL said it saw slightly higher foot traffic over the holiday weekend but there was no corresponding pick up in sales between Dec. 22 and 27. In fact, it said sales at its Hong Kong and Macau stores posted a mid-teen percentage decline. Chow Sang Sang, another large jewelry chain, saw a 10 percent drop in sales from the prior Christmas, according to The South China Morning Post. Chow Sang Sang declined to comment as of press time.
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Arnault Castel, owner of the boutique chain Kapok said that Christmas sales were flat and considering “what’s going on, flat is good.”
“The beginning of the year was a bit difficult so we had a lot riding on this Christmas and we’re maintaining. No increase but it’s flat,” Castel said. “There’s a shift in what people are buying. We are a bit weaker on the apparel side but everything that is accessory and lifestyle, we continue to be strong.”
The economy wasn’t only to blame for the weaker demand for clothes, according to Castel, but a different mentality to buying.
“I think a lot of people feel they just have too many clothes and they don’t need to buy more but they still like gifts and finding something to decorate,” he said. “What we see is brands that are not trend centric, but things you can wear for many years are doing better. People are getting tired of this fast-paced, trendy must-buy fashion.”
Hong Kong’s immigration department noted the surge of Mainland Chinese visitors over the four-day public holiday spanning Dec. 23 to 26.
After several boom years from serving as the prime shopping outpost for consumers coming across the border, Hong Kong retailers have collectively witnessed a 20-month long slump. As reported, brands like Ralph Lauren and Prada have shuttered stores here and more closures are expected. However, the industry has been hopeful that the decline is starting to bottom out.
The city is expected to record a 7 percent year over year decline in retail sales this year. Even if the Christmas season maintains last year’s levels, it is doing so on a very low base. Last December was an 8.5 percent decrease over the same period in 2014.
Stores are dealing with an unusually late winter this year, a deterrent to consumers making purchases of bigger ticket items like winter coats and boots. Most of December registered about five degrees Celsius warmer than historical averages and the temperature on Boxing Day reached as high as 24 degrees Celsius, about 75 Fahrenheit.