The interior of a shopping mall in Hong Kong.

July was another tough month for Hong Kong retail. But there are signs that the situation is starting to improve as cash-rich mainland Chinese tourists head back to the shopping mecca.

Retail sales in July in Hong Kong fell 7.7 percent to 34.6 billion Hong Kong dollars, or $4.46 billion at current exchange, Hong Kong’s Census and Statistics Department said Monday. That figure represents an improvement over June, when sales dropped 8.9 percent. Looking at the first six months of the year, sales sank 10.5 percent, registering their deepest fall since 1999.

“The performance in July was mainly dragged by the fall in visitor spending on some big-ticket items, and also reflected the more cautious local consumer sentiment amid an uncertain economic outlook,” the department said.

As reported earlier this month, the number of mainland Chinese visitors to Hong Kong actually rose in July, ending a 13-month streak of declining figures.

The city is facing tough competition from other destinations as Chinese tourists head to places like Japan, South Korea and Thailand.

In terms of product categories, sales of jewelry, watches and clocks, and valuable gifts decreased by 26.2 percent in July. Sales of footwear and accessories slid 1.1 percent.

Apparel and beauty fared better. Sales of apparel grew 1.8 percent while that of medicines and cosmetics rose 9 percent.