Retail sales edged up a measly 3.8%

Blame it on the recent nasty weather condition.

According to Barclays, July Hong Kong retail sales growth was only +3.8% y-y, which is significantly lower than the consensus estimate of 9% (according to Bloomberg), and is much slower than June's +11% y-y growth. Although July was impacted by a week of typhoon/heavy rain; these figures seem to be much lower than consensus expectations.

Here's more from Barclays:

The growth slowdown was seen across most categories. Clothing and footwear saw no growth in July compared to 12% y-y growth in June. In terms of volumes, clothing and footwear sales were down by 2%. Department store sales grew 3% y-y in July vs +9% in June. Jewellery and watches saw 1% growth in July vs 3% growth in June. Consumer durables though still saw +11% y-y growth in July, although this compares to +30% y-y in June.

The cosmetics and medicines category was the best performer among all categories. July still saw +12% y-y growth in value terms and +10% growth in volume terms (vs June was +19% y-y in value terms). This again shows the resilience of the cosmetics subsector; and is also consistent with the strong latest quarter-to-date figures that Sa Sa had already reported. Re-capping, Sa Sa saw 19.5% sales growth and 16.3% SSS growth in its core Hong Kong/Macau segment during 1 July to 19 August.

Mainland visitor arrival growth remained strong in July at +22% y-y; but much of this growth is driven by same-day visitor growth. Same-day visitors were +37% y-y in July; while overnight visitors were only +8% y-y (see figure 3). Same-day mainland visitors had an average overall HK$2439 spend per visitor in Hong Kong using 2011 data (Source: CEIC, Barclays Research); this is much lower than the HK$5794 spend per overnight mainland visitor in the shopping category alone (Source: CEIC). Therefore we believe these same-day visitors have benefited lower ticket item retailers such as cosmetic retailers more than the luxury end segment.