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Hong Kong retail sales decline sharply in January

Hong Kong retail sales fell by 6.5 per cent in January – continuing the downward trend.

But the Census and Statistics Department (C&SD) cautioned against reading too much into the figures for January and February given the timing of Lunar New Year.

“The retail sales figures for January may be somewhat affected by the difference in timing of the Lunar New Year, which fell on February 8 this year, but on February 19 last year. As such, it would be more meaningful to examine January and February figures combined for a clearer picture of the underlying trend, when available,” a spokesman said.

“Retail sales tend to show greater volatility in the first two months of a year. Local consumer spending normally attains a seasonal high before the festival.”

The value of total retail sales in January was provisionally estimated at HK$43.6 billion. The revised estimate of retail sales in December was a decrease of 8.5 per cent year-on-year.

After netting out the effect of price changes over the same period, the volume of total retail sales in January decreased by 5.2 per cent and the revised estimate for December was a decrease of 6.1 per cent.

Jewellery, watches and clocks, and valuable gifts led the decline, falling 16.3 per cent. Apparel sales fell 4.9 per cent; department store sales and medicines and cosmetics by 3.6 per cent) electrical goods and photographic equipment by 19.7 per cent; furniture and fixtures by 0.5 per cent; books, newspapers, stationery and gifts by 9.7 per cent; Chinese drugs and herbs by 0.2 per cent; and optical shops by 6.3 per cent.

On the positive side, supermarket sales rose 8 per cent, food, alcoholic drinks and tobacco by 7.2 per cent; and footwear and accessories by 5.7 per cent.

Based on the seasonally adjusted series, the value of total retail sales decreased by 6.4 per cent in the three months ending January 2016 compared with the preceding three-month period, while the volume of total retail sales decreased by 6.5 per cent.

The spokesman spokesman indicated that retail sales stayed weak and continued to fall in January, reflecting the protracted slowdown in inbound tourism and also weakening local consumption sentiment amid the uncertain economic outlook.

“The near-term outlook for retail sales will remain constrained by the sluggishness in inbound tourism. The impact on consumer sentiment from recent consolidation of asset markets also needs to be closely watched. External uncertainties, including dimmer global economic outlook and the US interest rate normalisation, may add further headwinds.”

More detailed statistics are available in the Report on Monthly Survey of Retail Sales, downloadable here on the C&SD website.

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