Retail Sales Plunge In Hong Kong

Hong Kong

With visitor arrivals to Hong Kong dramatically falling, the financial center’s retail sales registered a double-digit drop in November. Retail sales by value retreated 23.6 percent in the month from the prior year, but the November drop was a bit better than the forecasts of economists and October’s record contraction, Bloomberg reported.

A spokesperson for the government said in a statement, according to the news outlet, “Retail sales continued to fall sharply in November as the local social incidents turned extremely violent, causing very severe disruptions to tourism- and consumption-related activities and further dampening consumption sentiment.”

The retail outlook in the short term will still depend on how those social incidents play out over time per the spokesperson. Both small and larger merchants are among those impacted by the city’s constant protests. Mainland China arrivals are said to comprise the far majority of all Hong Kong visitors and dropped 58 percent in November.

According to information Bloomberg complied from the Hong Kong Tourism Board, overall visitor numbers dropped under 3 million for the first time since February 2011.

In addition, Louis Vuitton is reportedly gearing up to close one of its locations in Hong Kong — a place where protests have impacted demand amid high rental costs. The decision to shutter the store reportedly came after the company couldn’t strike a deal with its landlord to reduce its rent.

The news comes as holiday sales rose at Tiffany & Co. despite challenges in Hong Kong and Japan. The jewelry company experienced double-digit sales increases in mainland China, which were offset by Hong Kong’s declines.

Global sales climbed approximately 1 percent to 3 percent from the first day of November through Christmas Eve in comparison to the same time in the prior year. Japan was a challenge for the firm, however, with sales declining 12 percent to 14 percent over the period after taking out currency fluctuation impacts.

Sales in the Asia-Pacific region for the merchant, with the inclusion of greater China, rose 7 percent to 9 percent after adjusting for the movements of currency. Sales increased 2 percent to 4 percent in the Americans, and performance was better in Europe, where the first registered an increase of 3 percent to 5 percent in sales.


New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.