Retail sales in Hong Kong dropped 9.8 per cent to HK$38.8 billion year on year in April.

According to Census and Statistics Department, it’s the sharpest drop in five years.

It says the notable fall in retail sales was mainly due to the plunge in the sales of jewellery, watches and clocks and valuable gifts as the number of mainland visitors to Hong Kong fell.

The value of sales of jewellery, watches and clocks, and valuable gifts decreased by 39.9 per cent in April 2014 compared with a year earlier. This was followed by sales of commodities in department stores (-1.3 per cent in value); electrical goods and photographic equipment (-8.3 per cent); miscellaneous consumer durable goods (-22.3 per cent); fuels (-0.6 per cent); and furniture and fixtures (-0.6 per cent).

“The drop is the biggest since February 2009. If the decline persists, it could affect the economy and the employment situation,” said financial secretary John Tsang Chun-wah.

The near-term outlook of retail sales business will continue to be clouded by the base effects and the changing visitor spending pattern, says Census and Statistics Department.