Hong Kong retail sales rise by 5.6% in October, amid continued tourism revival

Hong Kong’s retail sales rose by 5.6 per cent in October compared with the same month last year amid the continued revival of tourism, but an industry leader expressed concerns about spending over the Christmas holiday as residents increasingly shopped over the border.

Provisional figures released by the Census and Statistics Department on Thursday showed that sales for October reached HK$33.8 billion (US$4.3 billion), with the modest growth marking the 11th consecutive month of improvement.

A government spokesman said retail growth was helped by the improving tourism market and spending linked to the “Night Vibes” campaign.

Hong Kong’s June retail sales up 19.6 per cent, boosted by tourism and consumers

“An expected further recovery of visitor arrivals should benefit the retail sector,” he said. “Continued improvement in household income and various activities that bolster the economy including the ‘Night Vibes Hong Kong’ [campaign] should also provide support.”

Across the first 10 months of the year, retail sales increased by 17.2 per cent compared with the same period in 2022.

Online sales remained strong, increasing by 8.4 per cent year on year, with transactions of HK$3.7 billion accounting for 11 per cent of the total retail figure. For the first 10 months of the year, the online numbers decreased by 0.9 per cent from the same period in 2022.

The city recorded 1.1 million visitors from across the border during mainland China’s National Day “golden week” holiday between September 29 and October 6.

The evening spending initiative, which started in September and runs until early next year, features night bazaars in Wan Chai, Kwun Tong, Kennedy Town and Temple Street in Yau Ma Tei, as well as other elements such as performances, cultural activities and dining.

“Yet, factors such as tight financial conditions and economic uncertainties will weigh on consumption sentiment,” the spokesman said. “The government will continue to monitor the situation.”

Government figures showed that as of the end of October, about 270,000 people had visited evening bazaars at three harbourfront sites under the nighttime campaign.

As part of the drive, this year’s National Day fireworks display attracted more than 430,000 spectators on both sides of Victoria Harbour, while about 140,000 people attended the Hong Kong Wine & Dine Festival held in Central. Shopping centres also reported more foot traffic.

Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, said more than 70 per cent of retailers were concerned about business performance during the Christmas season amid expectations that many residents would travel outside the city to make the most of the break.

“They are deeply worried, as Hongkongers will inevitably head north and travel overseas during the long holiday,” she said. “This will threaten their retail business.”

The association was downbeat about retail sales in the first half of next year, estimating at least a single-digit contraction in business because of the growing trend of Hongkongers heading to the mainland for spending sprees.

Deep Hong Kong discounts for Singles’ Day event as businesses aim to boost sales

“We tend to be pessimistic towards the outlook of the retail industry,” Tse said. “In view of the uncertain economic environment and challenges we are facing, we expect retail sales to experience a single-digit to even low double-digit decline in the first half of next year.

“More Hongkongers will head north next year compared with the first half of this year when the exodus had not really surfaced following the city’s reopening of its borders with the mainland.”

Hong Kong tourism chief accused of poor handling of Kai Tak Cruise Terminal

The travel trend has raised concerns among retailers and the catering industry, with Chief Executive John Lee Ka-chiu saying more than 200,000 Hongkongers travelled to the mainland every weekend.

Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades, earlier estimated 5.35 million people went to Shenzhen or other mainland cities in the Greater Bay Area last month, generating a spending outflow of more than HK$4 billion.

The Tourism Board earlier revealed that 26.78 million visitors arrived in the city in the first 10 months, and it expected the full-year number to reach more than 30 million. The figures are still less than half of the record 65 million tourists in 2018.