7,000 retailers to shut amid unrestLocal | Charlotte Luo 10 Dec 2019
An estimated 5,600 retail staff may be out of jobs within the next six months, according to findings from the Hong Kong Retail Management Association.
The findings were released yesterday as third-quarter figures showed retail sales had dropped 17.5 percent year on year.
Between October 29 and November 22, the association surveyed 176 companies that operated a total of 4,310 retail shops in the city.
The results showed that 97 percent recorded a loss since June - when the ongoing protests started. Among them, 90 percent said their losses were medium or above while 57 percent suffered serious losses. Eleven percent said they would close down their business in the next six months.
The association estimated 7,000 businesses would close down, among the 64,000 licensed retailers citywide.
For those not winding up their business, they are planning to cut down the number of shops, with 16 percent of small and medium enterprises planning to close down half of their branches and 49 percent of retail chains preparing to shut down 10 to 20 percent of their outlets.
Thirty percent of the 176 companies said they would lay off 10 percent of staff on average in the next six months, if the social unrest continues.
Currently, there are around 270,000 retail employees in Hong Kong, so the association estimates around 5,600 may be facing layoffs in the next six months.
Annie Tse Yau On-yee, chairwoman of the association, said the situation in the retail sector is the worst ever, predicting that retail sales in December will not be much of a difference from October. In October, retail sales dropped 24.3 percent to HK$30.1 billion in October year on year.
She called on different stakeholders to support the retail industry through difficult times.
"The government has launched several rounds of relief measures, hoping that they can be implemented as soon as possible, especially in consultation with banks to relax the approval procedures and requirements for the SME Financing Guarantee Scheme," she said.
She also said the biggest and most effective way to help is to reduce rent as salary and rent are retailers' biggest expenditures.
According to the survey, 38 percent of the respondents' property owners agreed to reduce rent and other fees. However, more than 80 percent said the amount of rent reduction was not enough. About 40 percent believed the rent reduction should be 50 percent while nearly 30 percent said it should be 30 percent.
The association urges property owners to provide rent relief for tenants based on their losses.