Caixin
Feb 05, 2021 08:22 PM
ECONOMY

Chart of the Day: Hong Kong’s Shopping Culture Battered by Covid-19

Hong Kong posted its steepest decline in retail sales since records began in 1981 as visitor numbers to the city collapsed and local residents tightened their belts amid the coronavirus pandemic, dealing another blow to the city’s already struggling economy.

Total retail sales in 2020 fell 25.5% in volume terms, marking the sharpest decline since the government began compiling the data 40 years ago, Hong Kong’s Census and Statistics Department said on Tuesday. By value, sales fell 24.3% to HK$326.5 billion ($42.1 billion) after an 11.1% drop in 2019.

COTD CHART

In December, retail sales fell 13.2% to HK$31.4 billion from a year earlier, more than triple the pace of the 4.1% decrease in November. The acceleration of the decline was due partly to social distancing measures put in place to contain the fourth wave of Covid-19 infections in the city, the statistics department said.

“(T)he business environment of the retail trade will remain challenging in the near term amid frozen inbound tourism and the ongoing local epidemic,” an unnamed spokesperson said in the statement. “It would thus be pivotal for the community as a whole to spare no effort to fight the virus and keep the epidemic under control at the soonest possible in order to foster the revival of retail business in particular and the overall economy at large.”

For 2020 as a whole, tourist arrivals to Hong Kong crashed 93.6% to 3.57 million, according to data from the Hong Kong Tourism Board.

Annie Yau Tse, chairperson of the Hong Kong Retail Management Association, said 58% of retailers polled by the association said they expect to close down some outlets in the first quarter of this year, while more than half said they would do so in the second quarter. More closures could add pressure to the city’s subdued job market. The unemployment rate jumped to a 16-year high of 6.6% for the October- December period, official data released Jan. 19 showed.

Contact reporter Tang Ziyi (ziyitang@caixin.com) and editor Nerys Avery (nerysavery@caixin.com)

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