HK retail challenges continue as sales slide 11.5% in May

Hong Kong’s retail sales for May have dropped 11.5% when compared to a year ago, marking the second consecutive month with a double-digit decrease. This is mainly due to the change in consumption patterns of visitors and residents.

According to the latest figures released by Census and Statistics Department, the value of total retail sales in May 2024 was provisionally estimated at HK$30.5 billion. For the first five months of 2024 taken together, it was provisionally estimated that the value of total retail sales decreased by 6.1% compared with the same period in 2023.

Of the total retail sales value in May 2024, online sales accounted for 8.7%. The value of online retail sales in that month, provisionally estimated at HK$2.6 billion, increased by 21.9% compared with the same month in 2023.

Analysed by broad type of retail outlet in descending order of the provisional estimate of the value of sales and comparing May 2024 with May 2023, the value of sales of commodities in supermarkets decreased by 3.4%.

This was followed by sales of other consumer goods not elsewhere classified (-8.9% in value); jewellery, watches and clocks, and valuable gifts (-21.4%); wearing apparel (-18.8%); food, alcoholic drinks and tobacco (-4.1%); commodities in department stores (-21.1%); motor vehicles and parts (-29.8%); fuels (-11.6%); footwear, allied products and other clothing accessories (-11.7%); furniture and fixtures (-15.9%); Chinese drugs and herbs (-15.1%); and optical shops (-18.4%).

On the other hand, the value of sales of medicines and cosmetics increased by 2.5% in May 2024 over a year earlier. This was followed by sales of electrical goods and other consumer durable goods not elsewhere classified (+2.2% in value); and books, newspapers, stationery and gifts (+6.9%).

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A government spokesman said the continuous decline of the total retail sales value is mainly due to the changes in the consumption patterns of visitors and residents, as well as the strength of the Hong Kong dollar. A relatively high base for comparison in the same period last year is also relevant.

Looking ahead, the spokesman said the retail sector may still face some challenges in the near term. "However, the central government's recently announced measures benefitting Hong Kong, including the further enhanced individual visit scheme and the increase of duty-free allowance for luggage articles for Mainland resident visitors, should help stimulate retail businesses."

The Hong Kong government's continuous efforts to promote a mega event economy and boost market sentiment should also provide support, the spokesperson added. Rising employment earnings and the recent stabilisation of the asset markets also bode well for the sector.

The spokesman also said the value of online retail sales increased by over 20% year-on-year in May reflects that the retail sector can seize new opportunities by adapting to changing consumption patterns through changing sales mode and venturing into new businesses.

The Hong Kong government will continue to support small and medium-sized enterprises in embracing digital transformation, including assisting the retail sector in adopting ready-to-use digital technology solutions through the Digital Transformation Support Pilot Programme, continued the spokesperson. 

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