Cash registers ring again for Hong Kong's November retail sales

It climbed 9.5% by value.

According to Barclays Research, Hong Kong’s November 2012 retail sales was +9.5% y/y by value, this is a re-acceleration from October growth rates (at +3.9% y/y) as the firm had anticipated. By volumes, November retail sales were +8.1% y/y, compared to October’s +3.6% y/y.

The firm believes Nov’s growth acceleration from Oct is supported by the resumption of stronger visitor growth rates, a stable labour market, as well as the onset of discounts attracting customer purchases. Jan-Nov 2012 cumulative retail sales were +9.9% by value and +7.1% by volume.

Here's more from Barclays Research:

Improved growth rates was across most discretionary segments:

• Jewellery and watches saw the most marked acceleration to +13.7% y/y by value in Nov compared to the 2.9% decline in Oct; by volume, it saw +11.5% y/y growth in Nov. This is consistent with the improved trends that Luk Fook and Chow Tai Fook had communicated for their Nov months. We believe this is partially helped by an easier base comparison into Nov.
• Clothing and footwear saw +8.2% y/y growth in Nov compared to flattish growth in Oct. However, this pick-up is after months of low-to-mid single-digit growth and we believe is partially driven by early discounts.
• Department stores had seen +10.9% y/y in Nov compared to 5.5% growth in Oct.
• Medicines and cosmetics remained at a double-digit growth rate at +13.1% y/y in Nov, although not as strong as October’s +16.1% y/y growth.

Food alcohol tobacco retail sales were +2.0% y/y and durables growth was +9.9% y/y in November.

November retail sales were partially supported by a stronger mainland China visitor growth rate of +30% y/y, it re-accelerated from October’s +21% y/y growth. Same-day visitors continued to grow strongly at +42% y/y in November, compared to a still decent +16% y/y for overnight visitors.

We are cautious on Dec and believe the y/y retail sales growth rate could slow from what we saw in Nov, as we believe 2012’s early Chinese New Year (CNY) had front-loaded some customer purchases and visitor arrivals into Dec 2011, and this creates a high base for y/y comparison for Dec 2012.

However, we would not be overly concerned because we believe that due to the mid-February timing of CNY this year (compared to late January in 2012), customer purchases were merely postponed into 1Q13, and 1Q13 y/y growth rates should re-accelerate again.