Friday, 1 April 2016

Retail Sales Plunge in Hong Kong

Causeway Bay may look busy but who is actually shopping?
Retailers in Hong Kong are freaking out with sales plunging 13.6 percent in the first two months of the year, the biggest slump since 1999. More bad news is expected later in the year.

The Hong Kong Retail Management Association expects retailers to see double-digit decline in the first quarter, and end the year with a contraction in the high single digits.

Part of the reason is due to declining visitor figures, which dropped 13 percent in the past year. Those from the mainland fell 18 percent even though there was an increase of 7 percent in overseas visitors, according to the Hong Kong Tourism Board.

Supermarkets seem to be the best retail sector at the moment
Some expect large-scale layoffs and a string of shop closures this year if the situation doesn't improve.

In 20 retail categories surveyed, only supermarket goods recorded growth, expanding 0.2 percent in the first two months of 2016, while 13 other categories saw double-digit declines.

Thomson Cheng Wai-hung, chairman of the association, was very surprised people didn't splurge for Chinese New Year, adding that local consumption had softened.

"We were all shocked... People would not spend money even during Lunar New Year," he said.

The biggest slump was in jewellery, watches and other valuables that mainlanders typically came to Hong Kong to buy, followed by sales of clothing and department store goods, which shrank 11.4 percent and 12.3 percent respectively.

Jewellery and watch sales dropped in January and February
Cheng said many locals and tourists were more interested in spending their money outside of Hong Kong.

So many people are flocking to Japan to go shopping as the yen is weak and why not go to a place where the residents are polite, the streets are clean and food is delicious?

The second best places for value is Taiwan and Thailand.

While the slowing down of consumption isn't good for the Hong Kong economy, environmentalists must be thrilled people are spending less. And with supermarket sales going slightly up, that must mean more people are cooking at home, which is good for the waistline and the heart.

Perhaps reading enough stories about how fast fashion is not good for the environment, or people wanting to save money are reading about budgeting have led them to cut down on spending too.

Or am I being totally idealistic?

This year is not good for many sectors -- we're all in the same boat. But honestly, who was the one who thought Hong Kong should only concentrate on mainland clientele?

Nothing lasts forever...

No comments:

Post a Comment