HONG KONG: Hong Kong retail has just experienced its worst quarterly performance in 17 years, new government figures have revealed.
Retail sales were down 12.5% in the first quarter of 2016 compared to the same period a year earlier, although the data for March indicated a slight improvement on the previous two months, as the rate of decline slowed.
The luxury sector was among the worst hit, as sales of jewellery, watches and clocks and valuable gifts slumped by 20.3% in March, the South China Morning Post reported.
Sales of electrical goods and photographic equipment were also badly affected, falling 20%, while those of apparel were down 11%. Department store sales declined 5.4%.
A government spokesman blamed a slowdown in inbound tourism and an uncertain economic outlook, and did not expect improvements until those factors changed.
There were some signs that things might be getting better as tourist numbers in March were up on the previous two months.
Total arrivals for the month were 10.9% down on March 2015, but that was less than the 13% year-on-year fall seen in the first two months of the year.
An earlier MasterCard spending survey, reported by Inside Retail Asia, reached broadly similar conclusions, as first quarter retail sales declined 11.7% year on year. Clothing and jewellery sales in March dropped by more than total retail sales; only grocery outperformed overall retail sales.
"The early Easter holiday did nothing to stimulate spending as consumer confidence remains subdued," said Sarah Quinlan, senior VP of market insights for MasterCard Advisors. She added that outlook remains bleak as long as the slowdown in spending by tourists from mainland China continues.
Data sourced from South China Morning Post, Inside Retail Asia; additional content by Warc staff