Sentiment has soured amidst heating trade tensions.
The positive momentum of Hong Kong’s retail sector visibly slowed in July after headline sales figures booked the first single-digit expansion of 7.8% in 2018 following five straight months of double-digit growth, according to the Census & Statistics department.
This translates to $38.9b worth of purchases by shoppers in July.
Heating trade tensions between the US and China may have contributed to souring consumer sentiment amongst locals and Mainland tourists, Chairman Thomson Cheng Wai-hung of the Hong Kong Retail Management Association told South China Morning Post. The weakening yuan could also pose a risk to Mainland spending by dampening the attractiveness of Hong Kong goods.
In a breakdown, the sales of jewellery, watches, clocks and valuable gifts led July’s purchases after rising 16.8% followed by fuels (15.2%) and medicines and cosmetics (12.7%).
Sales of department store commodities; motor vehicles and parts; and footwear, allied products and other clothing accessories also rose by 8.6%, 6.7% and 5.5% respectively over the same period.
On the other hand, the sales of books, newspapers, stationary and gifts dipped 1.4% in July.
Although sustained tourism figures are expected to support retail performance in the near term, the government has flagged key risks with the trade war as the most prominent. “|[C]onsumer sentiment may turn less sanguine going forward if the external uncertainties persist or escalate further,” a government spokesperson said in a statement.
Do you know more about this story? Contact us anonymously through this link.