HONG KONG. Total retail sales in Hong Kong fell -10.5% year-on-year in the first half of 2016, the biggest decline since 1999, according to the Special Administrative Region’s Census and Statistics Department
June saw a -8.9% fall, the 16th consecutive monthly contraction.
After netting out the effect of price changes over the same period, June saw a -9.6% decrease and the first half saw a -10.1% decline.
The figures are an important indicator for travel retailers downtown and at Hong Kong International Airport as the local market is so influenced by sales to tourists in general and Mainland Chinese visitors in particular.
As revealed by The Moodie Davitt Report, Airport Authority Hong Kong has decided to put its core category airside retail business out to tender later this year. The Authority is still finalising the make-up of the concession structure and may alter the mix from the traditional trio of liquor & tobacco, perfumes & cosmetics and airside general merchandise as part of a concerted effort to stimulate spending.
Hong Kong International Airport’s growing and diverse passenger base, together with the Authority’s highly proactive marketing campaigns and heavy retail investment strategy are certain to attract a highly competitive field for the tender, The Moodie Davitt Report believes.
The Census and Statistics Department’s results cover the total spectrum of retail sales from high-end boutiques to supermarkets but within the results certain categories are particularly closely monitored by Hong Kong International Airport retailers.
Sales of jewellery, watches and clocks, and valuable gifts, for example, fell by -21.1% in the first half, after a -15.6% fall in 2015. Wearing apparel sales were off by -8.1% and footwear, allied products and other clothing accessories by -5.7%. Food, alcoholic drinks and tobacco (excluding supermarket sales) rose +1.2%.
Department store sales were down by -9.0% in the first six months, again off a soft 2015 (-4.1%).
Commenting on the results, the Hong Kong Retail Management Association said: “Other than ‘Consumer durable goods’, the sales of ‘Electrical goods and photographic equipment’ registered the highest drop (-25.7% in value & -23.3% in volume), followed by ‘Jewellery, watches and clocks, and valuable gifts’ (-18.7% in value & -18.2% in volume).
“Most of the member companies anticipate the downward trend to continue but slow down in the remaining year of 2016, taking into account a lower base recorded in the second half of 2015.”
