SHANGHAI — Hong Kong retail’s nosedive continued in May, with sales for the city sliding by 32.8 percent compared to a year ago, government data showed.
Total retail sales for May came to $26.8 billion Hong Kong dollars, or $3.46 billion. Year-over-year, jewelry and timepieces fell by 69.7 percent, followed by cosmetics down 62 percent, footwear and accessories 39.7 percent, department stores 37.8 percent, optical shops 36.3 percent, and apparel 35.6 percent.
For the first five months of the year, retail sales decreased by 34.8 percent compared with the same period in 2019.
The city has been on its knees since June last year when political protests began. International retailers have begun pulling back or even exited the market altogether. Earlier this month, Greek jeweler Folli Follie closed its network of 12 stores in the city, while Victoria’s Secret closed its Causeway Bay flagship store in Hong Kong, which it had only opened in July 2018, in contrast to its heavy investments in mainland China.
Adding to Hong Kong’s woes, on Monday, the U.S. made its first steps to revoke Hong Kong’s special trade status with the country, barring the export of weapons and sensitive technology to Hong Kong and removing export license exceptions. For retailers, this does not have a large immediate impact but is huge symbolically as further actions to eliminate Hong Kong’s status are being evaluated.
It came in response to a new national security law imposed by Beijing that has alarmed many in the former colony, who say it will eliminate dissent. Under the “one country, two systems” policy, the city was promised certain degrees of autonomy until 2047.
“I think that citizens will have concerns and as to how that will impact consumption, we will have to measure,” commented HKRMA chairwoman Annie Yau Tse in a phone briefing with media. “We hope that there is a good environment to do business in. But whether the national security law will result in a stable environment or not, we have to see.”
July 1 marks the anniversary of the 1997 handover of Hong Kong from the U.K. to China. Despite a ban from police on the annual march citing COVID-19 concerns, protest groups are planning to gather anyway. Last year on the anniversary, an estimated 1 million people took to the streets in protest of Beijing’s tightening grip over the city.