More pain for retailers forecastBusiness | Staff reporter 26 Jan 2021
The Hong Kong Retail Management Association expects sales will remain in dire straits in the first half of the year, falling 20-30 percent compared with 2019 as social distancing measures continue to bite.
And even if the pandemic eases later in 2021 they are forecast to remain flat compared with last year.
The readings came after local retail sales fell for a 22nd straight month, with the association holding a pessimistic view about the retail market amid the poor business environment. Retailers' operating costs, especially rents and employee salaries, remain at the levels of two or three years ago even as a large number of stores lose money, it was noted.
And with the end of the government's Employment Support Scheme the retail industry can expect to be hit by layoffs and bankruptcies.
There will be a large number of empty shops in traditional shopping areas such as Mong Kok and Tsim Sha Tsui, the HKRMA added.
Making the situation worse, as the US dollar continues to weaken retailers are experiencing an increase in sales cost, especially for goods from Europe and the mainland.
At the same time, retailers have to cut prices to serve as promotions amid the lack of consumer confidence.
And the retail market may get even worse if the pandemic continues as it is now or worsen with another Covid-19 wave striking.