Downturn has not dampened shoppers

Hong Kong - The volatile economic climate has not stopped consumers from visiting shopping malls with visits in the month of October up 6.6% year-on-year.

The Footfall Index report from Experian, which measures the change in visitor numbers,shows that despite negative media coverage on the global credit crunch and an imminent global economic recession, it has not deterred shopper behaviour with attendance to shopping centres growing.

The optimistic retail outlook in Hong Kong is reflected in the figures for the 12 weeks period from September 1 to November 23 that shows shopper numbers up by an average of 7.1% per week over the corresponding period in 2007.  

Yannick Kennel (pictured), director of FootFall for Experian Asia Pacific said the impacts the global financial climate is now posing to the Asian retail market are more on consumers' psychological thinking rather than their actual spending power.

He said that in Hong Kong, retail sales in September remained optimistic with sales value increasing by 6.9% and sales volume by 1.8% over a year earlier.

"It is, therefore, not surprising to see the high turnover in shopping centers," Kennel said.

Kennel predicts that the growth in shopper numbers in Hong Kong enjoyed by retailers since September is expected to continue to Christmas but in a moderate degree.

He observes that they are already seeing a slowdown in the retail market growth as the double-digit increase in both sales value and volume in March gradually shifted to a single-digit rise in September.

"While shoppers are coming out in greater numbers this year, their festive spending will be less than last year in terms of both sales value and volume," Kennel added.

With one month away from Christmas, he advised local retailers to capitalise on the upbeat consumer sentiment and get prepared for the peak shopping season in December.

He suggested smart retailers should offer more promotions and better packages and offerings with lower entry price points to appeal to price-conscious consumers.

While 2008 has been a positive year for retailers in Hong Kong with footfall figures for the year-to-date up 5.7% over 2007, Kennel said the knock-on effects of the global financial crisis will begin to be reflected in the local market after Chinese New Year next year, which means a tougher year in 2009 for retailers.