Hong Kong’s retail rebound lost steam in March, posting a 20.1 per cent year-on-year increase that was significantly lower than February’s figure, despite the easing of Covid-19 social-distancing rules.
Provisional figures released by the Census and Statistics Department on Tuesday showed retail sales in March had risen to HK$27.6 billion (US$3.5 billion).
But that mark has slid back to last October’s level, and is eclipsed by the 30 per cent year-on-year figure in February, the highest climb on record.
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A government spokesman said the latest performance was still far below pre-pandemic levels.
“While local consumption sentiment saw some improvement following the gradual relaxation of social-distancing measures since mid-February, the near-term outlook for the retail trade is still challenging as inbound tourism remains in the doldrums,” he said.
He called for the community to get vaccinated to reboot consumption.
About 7.7 per cent of the sales in March were online transactions, a 43.3 per cent jump to HK$2.1 billion from the same period last year.
The latest figure compares with the 42.1 per cent contraction from the same month last year, which was recorded during the first wave of Hong Kong’s coronavirus crisis.
Retail is among the hardest-hit industries after tourism ground to a standstill in the city following the closure of all but three border checkpoints for more than a year.
There is no indication of when borders will reopen again, with the picture particularly uncertain regarding mainland China.
Shoppers appeared more active in March after social-distancing rules were relaxed in mid-February.
In 2021’s first quarter, the value of retail sales expanded 7.5 per cent year on year.
Over that period, Hong Kong’s economy bounced back by posting growth of 7.8 per cent, an 11-year high that followed an all-time low registered a year ago.
Jewellery, watches, clocks and other valuables were March‘s top performers, jumping 81 per cent year on year.
Sales of apparel were up 77.4 per cent, while electrical goods and consumer valuables were 44.8 per cent higher.
Annie Tse Yau On-yee, chairwoman of Hong Kong Retail Management Association, was not impressed by the March figures, saying the growth stemmed from a very low base of comparison in the same period last year.
She said breakthroughs for consumption woes hinged on improvement in the city’s unemployment rate and when borders would be reopened.
“We don’t expect any major recovery in the industry to pre-Covid-19 levels soon. Consumers are refraining from spending until they receive the [government’s] HK$5,000 digital vouchers, and there is uncertainty on whether the travel bubble with Singapore will really take off on May 26,” she said. “These initiatives will have limited impact on retailers.”
Tse was referring to the HK$36 billion voucher scheme authorities planned to launch in the summer to boost local spending. The Hong Kong-Singapore air travel bubble is due to take off on May 26 after it was derailed at the eleventh hour last November by a local outbreak.
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