(Source: Inside Retail Asia | 31 March 2016)
Hong Kong retail sales tumbled a massive 20.6 per cent in February, the biggest fall since 1999.
Even after taking into account the timing of Lunar New Year, the decline for the first two months was 13.6 per cent compared with January and February 2015.
The Census and Statistics Department (C&SD) says total retail sales in February 2016 were provisionally estimated at HK$37 billion, The revised estimate of the value of total retail sales in January was a 6.6 per cent decrease year-on-year.
A government spokesman said retail sales “slackened further” from last year, entering 2016.
“Taking the first two months of 2016 together to remove the distortions caused by the difference in timing of the Lunar New Year holidays, retail sales recorded a double-digit decline over a year earlier.
“Apart from the severe drag from the protracted slowdown in inbound tourism, the asset market consolidation might also have weighed on local consumption sentiment,” the spokesman said.
“The near-term outlook for retail sales will still be constrained by the weak inbound tourism performance and uncertain economic prospects.”
After netting out the effect of price changes over the same period, the volume of total retail sales in February 2016 decreased by 19.5 per cent compared with a year earlier and for the first two months of 2016 combined, by 12.3 per cent in volume.
“In interpreting these figures, it should be noted that retail sales tend to show greater volatility in the first two months of a year due to the timing of the Lunar New Year. Consumer spending in the local market normally attains a seasonal high before the festival. As the Lunar New Year fell on February 8 this year but on February 19 last year, it is more appropriate to analyse the retail sales figures for January and February taken together in making year-on-year comparison,” the spokesman said.
Predictably, jewellery, watches and valuable gifts led the decline, falling 24.2 per cent in February. In order of their impact on the overall result, based on size of the category, apparel sales fell 11.4 per cent, department store sales by 12.3 per cent, electrical goods and photographic equipment by 26.7 per cent; footwear and accessories by 7.4 per cent; books, newspapers, stationery and gifts by 8.9 per cent; furniture and fixtures by 6.5 per cent; Chinese drugs and herbs by 7.8 per cent; and optical shops by 8.3 per cent.
Supermarket sales rose by 0.2 per cent, the only category to finish the month in positive territory.