Hong Kong Retail Remains Weak in August

RAPAPORT… Sales of jewelry and other luxury items in Hong Kong slid in August as coronavirus cases surged.

Revenue from jewelry, watches, clocks and other valuable gifts plunged 38% year on year to HKD 2.46 billion ($317.5 million) for the month. While the figure showed a slowdown in the decline reported over the past few months, it did not necessarily indicate a recovery, Hong Kong’s Census and Statistics Department reported Wednesday. Sales in all retail categories slipped 13% to HKD 25.56 billion ($3.3 billion).

“Retail sales remained weak in August amid the third wave of the epidemic,” a government spokesperson said. “While the year-on-year decline narrowed visibly, it was mainly attributable to a very low base of comparison.”

The two-week quarantine the Hong Kong government imposed on tourists arriving from mainland China — an important source of luxury sales — has also hindered retail as consumers turn to local purchasing, with the number of arrivals from China falling 99.9% in August. The situation is expected to persist in the near future.

“As economic conditions remain under pressure and inbound tourism is unlikely to show any swift recovery in the near term, the business environment of the retail trade will remain difficult,” the spokesperson added. “Nonetheless, local consumption sentiment may further improve if the recent stabilization of the local epidemic situation sustains.”

Revenue from jewelry, watches, clocks and other valuable gifts slumped 62% to HKD 18.99 billion ($2.45 billion) for the first eight months of the year. Sales in all retail categories declined 30% to HKD 212.88 billion ($27.47 billion) for the January-to-August period.

Image: Hong Kong. (Pixabay)