Hong Kong luxury retail sales fell sharply in July, affected by continued protests in the city and an escalation in the US-China trade war.
Revenue from jewelry, watches, clocks and other valuable gifts dropped 24% year on year to HKD 5.49 billion ($700.4 million) during the month, the municipality’s Census and Statistics Department reported last week. Sales across all retail categories slipped 11% to HKD 34.43 billion ($4.39 billion).
Luxury stores have been forced to shut down due to demonstrations against an extradition bill that began in June. Hong Kong has also suffered a drop in tourism as shoppers from mainland China, who usually travel to the municipality to purchase luxury goods faced airport strikes and transportation closures. The number of tourists visiting the Hong Kong was down 5% to 5.2 million in July, the Hong Kong Tourism Board reported. Of those, 4.2 million came from mainland China, a decline of 6% over the same period last year.
“Retail sales worsened further to post a double-digit…fall in July, reflecting the weak local consumer sentiment and significant disruptions to inbound tourism and consumption-related activities arising from the recent local social incidents,” a government spokesperson noted.
The government expects weakness in the market to continue, as conditions persist, it explained.
“Escalated US-[China] trade tensions and subdued economic conditions continue to dampen consumer sentiment,” the spokesperson added. “The situation may even deteriorate further if the social incidents involving violence do not come to a stop.”
In the first seven months of the year, retail sales of jewelry, watches, clocks and other valuable gifts decreased 9% to HKD 46.11 billion ($5.88 billion). Sales in all retail categories for the January-to-July period fell 3.8% to HKD 275.72 billion ($35.16 billion).
In July, the number of tourists visiting Hong Kong was down 5% to 5.2 million, the Hong Kong Tourism Board reported. Of those, 4.2 million came from mainland China, a decline of 6% over the same period last year.
Image: Protesters at Hong Kong international airport. (shutterstock)