Sales of jewellery, watches and luxury goods sector fell 11.4%.
Hong Kong retail sales fell for the third consecutive month in April after dropping 4.5% YoY in value to extend a 0.2% decline fall in March, a report by Knight Frank revealed. YTD, retail sales fell 2%.
Purchases of jewellery, watches and luxury goods sector continued to weaken, with sales value plummeting 11.4% YoY, whilst the fuel and food, alcoholic drinks and tobacco segments were the only industries to record a marginal YoY increase in retail sales at 3.2% and 0.8%, respectively.
“The challenging retail climate and deteriorating global outlook have promoted landlords to take a risk-off approach and offer steep rental concessions to attract tenants,” Knight Frank Greater China’s director and head of research and consultancy David Ji.
Knight Frank noted how a low floor unit in The Galleria, at 9 Queen’s Road Central, covering 6,500 sqft with a 1,500-sqft rooftop flat, was leased to a food and beverage (F&B) operator for a monthly rent of $150,000 or $23 psf, which was much lower than the current market rent level.
On the other hand, leasing momentum has slowed down in recent months, as retailers have adopted a very cautious approach to expansion, which has also exerted downward pressure on rents.
In terms of business and operation strategies, many leading retailers have transformed and upgraded their businesses to face market headwinds.
“Harvey Nichols Hong Kong, for instance, will introduce a new format flagship store in Pacific Place in September 2019, with technology the core element in the shop,” Ji said. The new flagship store will reportedly showcase three times the offerings of the existing store, whilst reducing the size of the store by 50%.
Do you know more about this story? Contact us anonymously through this link.