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Watches, jewellery skewing real rate of Hong Kong retail sales growth

Booming trade in watches, jewellery and gifts are flattering the overall performance of Hong Kong retail sales this year.

For the first four months combined, retail sales are up 13.9 per cent year on year.

But while the consistent double-digit increases in sales over the first four months of this year serve as an encouragement for the broader retail market – not to mention nervous landlords – high-price goods are dominating the numbers.

Due to their sheer value, fluctuations in sales volume of the “jewellery, watches and clocks and valuable gifts” category, (as defined by the Census and Statistics Department), always has the greatest impact on the overall figure. Thus it is difficult to get a sense of the more mainstream, locally driven retail sales market.

April’s 12.3 per cent rise in total Hong Kong retail sales followed an 11.5 per cent rise in March and a 15.7 per cent gain in combined January-February, traditionally combined to allow for true year-on-year comparisons due to the timing of Lunar New Year.  

In January-February, jewellery, watches and valuable gifts sales rose 21 per cent, in March by 23.1 per cent and in April by 24.6 per cent. So that category is growing by a faster rate each month so far this year.

Arguably, apparel sales may well be a better bellwether of the broader market, despite being influenced by the climate. In January-February, apparel sales rose 19.5 per cent, in March by 11.2 per cent and in April by 6.3 per cent – figures which paint a very different trend to watches and jewellery.  

Medicines and cosmetics, usually one of the other categories with strong influence over the total figures, grew by 17.4 per cent in January-February, by 16.5 per cent in March and by 17.9 per cent in April: very stable growth.

Clearly, Hong Kong’s overall retail sales growth is being driven by the rising number of mainland visitors, after a significant lull in that market for the three years or so until mid last year.

A government spokesman says the sustained double-digit increases this year have been underpinned by strong local consumer spending as well as buoyant inbound tourism. There is every indications those tourist numbers will hold up in coming months.

Other categories with a strong performance in April included electronics up 17.1 per cent, department stores up 12.6 per cent, footwear and accessories up 9.4 per cent, and optical shops by 8 per cent.

But it was a far less spectacular month for supermarkets, where sales rose just 1.1 per cent, furniture stores – up 1.4 per cent – and books and stationery retailers who pretty much stood still at 0.3 per cent.

So while the luxury sector is booming again, the golden era has not yet returned for many retail categories.

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