The protest-hit catering industry has not bottomed out yet, though the social unrest has eased, as more than 500 restaurants have pulled down their shutters since June last year, according to Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades.
In comments to local media, Wong said the costs of opening a restaurant are heavy and many restaurant owners were just hoping to get through the Lunar New Year. Wong said he has not seen landlords who are willing to slash rents.
Hong Kong dessert shop chain Hui Lau Shan has closed more than 10 branches over the past year, according to reports.
Hui Lau Shan owned 24 branches in Hong Kong in January, compared to 38 at the end of 2018.
Even though some branches were granted rent cuts, it is still difficult to sustain the business, Hui Lau Shan said.
Secretary for Labour and Welfare Law Chi-kwong expected more shops to close after the Lunar New Year.
Kelvin Lau, senior economist at Standard Chartered Hong Kong, estimates the unemployment rate will climb to 4.8 percent at the end of the year, rising from 3.3 percent in December.
"We foresee the jobless rate will be under upward pressure for the whole year, especially in the industries reliant on domestic demand, such as catering and retail," Lau said.
Meanwhile, Haidilao International (6862), China's biggest hotpot restaurant chain, said all the branches in the mainland will close until the end of January to help prevent the spread of the Wuhan virus.
Haidilao's Hong Kong branches will continue to operate, local media reports.
In other news, Swiss watch export growth weakened to the slowest pace in three years as the market for lower-priced timepieces evaporated and the virus outbreak threatens to pummel the industry.
Shipments rose 2.4 percent to 21.7 billion francs (HK$173.6 billion) in 2019, the Federation of the Swiss Watch Industry said. Exports to Hong Kong dropped 11 percent as political protests led to store closures in the top export market.
Swiss watchmakers this year will be challenged to find markets to offset China, where consumption will likely slump because of the spread of the viral disease.
Hui Lau Shan has closed more than 10 branches over the past year. SING TAO
