City's retailers battle extended slump

Staff reporter

Hong Kong's retail sales fell for the 12th straight month, seeing a 13 percent year-on-year drop in February, sharper than January's 3.1 percent, partly due to the earlier Chinese New Year in 2025.

The value of total retail sales was estimated to be HK$29.4 billion.

It was provisionally estimated that the value of total retail sales for the first two months of 2025 decreased by 7.8 percent compared with the same period in 2024.

Online sales made up 7.8 percent of Hong Kong's total retail sales in February, falling 7.3 percent year-on-year to HK$2.3 billion, following a 2.8 percent year-on-year increase in January.

A government spokesman said that looking ahead, the retail sector is expected to benefit from Beijing's measures to boost the mainland economy, the government's push for tourism and mega events, and rising job wages, but challenges remain from shifting consumption patterns of visitors and residents.

Hong Kong Retail Management Association chairwoman Annie Tse Yau On-yee said retail sales in March and April are expected to narrow their decline or see slight growth, helped by a low base effect, as sales started to weaken from March last year.

"Around half of the association's members reported flat or slightly higher sales in March, an improvement from previous months when only about 10 percent saw stable or rising business," she said.

The expansion of mainland e-commerce platforms into Hong Kong with brick-and-mortar stores is becoming a trend and could impact the sector, Tse said, pointing out that local retailers face higher costs due to quality control requirements, whereas mainland platforms operate with lower overheads, allowing them to offer cheaper products.

The association is in talks with the government on ways to reduce local retailers' costs and enhance their competitiveness, she added.