Hong Kong retail sales slid in April as local consumers made outbound trips during the Easter holiday period, and poor weather kept shoppers in.
Revenue from jewelry, watches, clocks and valuable gifts declined 29% year on year to HKD 3.75 billion ($479.5 million) for the month, the municipality’s Census and Statistics Department reported last week. Sales in all retail categories dropped 15% to HKD 29.58 billion ($3.78 billion). Those figures compare to March’s year-on-year decreases of 17% for hard luxury and 7% overall.
The downturn in jewelry over the last two months follows several months of growth for the category. The decline is partially the result of a weak comparison with the same period last year, when the recently reopened border between China and Hong Kong buoyed tourism. The municipality derives a large portion of its luxury revenue from visitors, primarily from the mainland.
Meanwhile, there were fewer shoppers spending money within the municipality, as locals traveled overseas for the holidays, and bad weather deterred the remaining populace from venturing out.
The Easter holiday period “rendered the effects of the changing consumption pattern of residents more visible,” a government spokesperson said. Traveling “not only affected their local consumption during their time away, but also could have reduced consumption in the days before and after the trips. Besides, the unstable weather conditions in April this year, with higher-than-usual rainfall, also had some impact.”
Besides last year’s “relatively high base of comparison,” the spokesperson added, other factors in April’s revenue decline included “the return to normalcy after the pandemic and the consumption voucher scheme.”
In the first four months of the year, hard-luxury sales slipped 8% year on year to HKD 18.23 billion ($2.33 billion). Sales in all retail categories fell 5% for that period to HKD 131.02 billion ($16.76 billion).
The government believes some of the current challenges will continue in the near term, but other factors could help improve retail sales.
“The changing consumption patterns of visitors and residents [will] continue to present challenges to the retail sector,” the spokesperson explained. “Nevertheless, the revival of inbound tourism, rising employment earnings, and the recent stabilization of asset markets [will likely] provide support. The government’s strenuous efforts to promote a mega event economy and boost market sentiment [will] also help.”
Image: The Mongkok shopping district in Hong Kong. (Shutterstock)