December rebound in luxury sales did not persist.
Hong Kong suffered from weak retail sales in the first two months of the year.
According to a report from Citi, the Golden Week holiday stretched across January and February this year, therefore dampening the CNY moving holiday effects.
"However, we think festive-related consumption may have been front-loaded in January, making February sales still to suffer from high base comparison," said Citi.
For the said two months, retail sales decreased 3.2% year-on-year by value and 3.6% yoy by volume, which was worse than the 2.9% yoy decline recorded for both value and volume back in December 2016. "It appears that sales post the CNY holidays have deteriorated somewhat," noted Citi.
The report added that shopping by tourists appeared restrained in the said period. Medicine and cosmetics saw a 1.4% yoy growth in January - February 2017, but the rebound in luxury items seen in December was not able to persist, as sales fell 0.8%.
"The more conservative spending mentality by tourists nowadays will continue to weigh on the expected recovery, as sales per tourists have declined materially in recent years on a variety of reasons. (e.g. China’s anti-corruption campaign, attractive prices and tax rebates when shopping for luxury brands in Europe, and more tourists only stay overnight in HK nowadays)," explained Citi.
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