Hong Kong’s retail blues continue.
November retail sales slid 5.5 percent, signaling that market conditions worsened from the previous month in the run up to Christmas. October sales slid just 2.9 percent, according to Hong Kong’s Census and Statistics Department.
The government body said that retail sales for the first eleven months of the year fell 8.6 percent- that drop outpaces expectations. Early last month, the Hong Kong Retail Management Association (HKRMA) forecast that retail sales should see a decline of about 7 percent this year.
“Retail sales saw a somewhat widened year-on-year decrease in November, conceivably dragged by the reduced tourist spending on some big-ticket items in that month. Nevertheless, the decline in retail sales in October and November combined was still smaller than that in the third quarter,” the government census bureau said. “Looking ahead, the performance of retail sales will depend on whether inbound tourism would improve and whether the various external uncertainties would affect local consumer sentiment.”
Thomson Cheng, chairman of HKRMA, was cautions on forecasts for January and the upcoming Chinese New Year holiday at the end of this month.
“The outlook for January is mixed. Some people think it will maintain, some think it will still drop,” he said during a conference call with journalists. “I think that the Hong Kong retail industry, they’ve done the stuff they need to do. They’ve talked to the landlords to renegotiate their lease, renovated stores, changed product merchandising…. [Chinese New Year] shouldn’t see a big drop next year unless there are extraordinary factors that would turn away visitors.”
Last week, initial feedback from retails on the Christmas season was mixed, with some stores expecting flat sales and others reporting declines.