Upgrades in transportation links may not be strong enough to offset visitors' weakening purchasing sentiments.
Hong Kong’s retail sales continued to trend downward in March as a result of weak market sentiment, recording a 0.2% YoY slip in value and 0.8% YoY decline in volume, a report by Knight Frank revealed. In Q1 2019, total retail sales dropped 1.2%.
Restaurants were found to have outperformed other retail segments during the month. According to the Census and Statistics Department (C&SD), total receipts from restaurants in Q1 2019 edged up 3% YoY to $31.5b. Non-Chinese and fast food restaurants outperformed other food and beverage segments, with a receipt value increase of 4.8% and 5.8%, respectively.
Also read: Restaurant receipts rose 3% to $31.5b in Q1
“The stable growth of these two segments is likely to be driven by visitors, especially by the same-day visitors,” David Ji, Knight Frank Greater China’s director and head of research and consultancy, explained. “Food and beverage retailers have also dominated leasing enquiries for shops at both high street level and in malls.”
He added that the positive same-day and overnight visitor figures in March, which climbed 26.8% YoY and 14.4% YoY, respectively, provided solid support for retail sales. “But we suspect the benefits of the improved cross-boundary transportation links may not be strong enough to offset visitors' weakening purchasing power in the near term amidst market uncertainties,” he noted.
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