No holiday cheer as retail sales dive 24pcBusiness | Avery Chen 3 Feb 2021
Hong Kong retail sales plummeted by a record 24.3 percent in 2020 as retailers have been suffering from the pandemic, despite a smaller-than-expected drop in December.
The December retail sales fell 13.2 percent to HK$31.4 billion from a year ago, following a 4.1 percent decline in November, data from The Census and Statistics Department showed yesterday. That beat economists' median expectation of a 14.7 percent contraction in a Bloomberg survey.
Retail sales have fallen for 23 straight months as the industry has been hard hit by anti-government protests and Covid-19. For 2020, retail sales dropped 25.5 percent in volume, or 24.3 percent in value, to HK$326.5 billion.
In December, sales for jewelry, watches, clocks and valuable gifts slumped 40.8 percent; medicines and cosmetics sunk 40.9 percent; and footwear, allied products and other clothing accessories dived 36.7 percent last month. But sales of commodities in supermarkets rose 11.7 percent.
A government spokesman said the business environment of the retail trade will remain challenging in the near term amid frozen inbound tourism and the ongoing fourth wave of the epidemic.
Local retailers are pessimistic about the upcoming Lunar New Year holiday, as the ongoing social distancing measures will continue to undermine consumer confidence, said Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association.
She expects retail sales will remain nearly flat in the first half and up to 20 percent of shops will be shut down in the second quarter, driving up the unemployment rate.