Hong Kong March retail sales down 7pc, snapping 15 months of growth

Hong Kong's March retail sales fell 7 percent from a year earlier,  partly due to a high base of comparison for visitor spending and the Easter holidays, government data showed on Friday.

Sales decreased to HK$31.2 billion (US$3.99 billion), snapping 15 consecutive months of growth. That compared with a 1.9 percent rise in February.

"The changing consumption patterns of visitors and residents may continue to pose challenges," a government spokesman said.

Hong Kong visitor arrivals are increasing following the pandemic lockdown, helping to drive 2.7 percent growth in the local economy in the first quarter. Although arrivals are increasing there are signs tourists are spending less.

The government's efforts to promote a mega event economy, a further revival in inbound tourism and rising household income should help to support the retail sector, the spokesman said.

In volume terms, retail sales decreased 8.6 percent year-on-year in March, compared with a 0.5 percent growth in February.

For the first quarter of 2024, total retail sales decreased by 1.3 percent compared with the same period in 2023, while the volume of total retail sales fell 3.1 percent, according to provisional estimates.

March visitor arrivals stood at 3.4 million, up 38.6 percent from a year ago period, data from the Hong Kong Tourism Board showed. That compared with 4.0 million in February, 3.83 million in January.

The number of mainland Chinese visitors stood at 2.46 million in March, up 24.9 percent from the same period in 2023. That compared to February's 3.25 million and January's 2.98 million.

Sales of jewelry, watches, clocks and valuable gifts fell 17.7 percent in March on year after a 3.6 percent decline in February.

Sales of clothing, footwear and accessories dropped 16.7 percent in March after an increase of 12.3 percent in February.

The government also said a longer period of tight financial conditions may dampen economic confidence and activities.

(US$1 = 7.8160 Hong Kong dollars)

(Reuters)