CROSBY Research – Crosby Bi-noculars (Bi-weekly Issue 65)

02 September 2024

HK retail sales continue to decline in July

• Hong Kong’s retail sales dropped 11.8% YoY in July, marking a fifth consecutive month of decline amid shifting consumption patterns and a strong local currency. Estimated retail sales shrank to HK$29.1bn in July, following a 9.7% decline in June and an 11.5% fall in May. For the first seven months of 2024, total retail sales sank by 7.3% compared with the same period in 2023.
• A government spokesman attributed the continued decline to changing consumption habits, the strong Hong Kong dollar, and other factors, including increased outbound travel during the summer holidays. Chinese mainland visitors accounted for over half of the total visitor arrivals to Hong Kong during the first seven months of the year. While mainland visitors in the past spent extravagantly in Hong Kong, today they prefer exploring cultural sites over shopping for high-end items. Meanwhile, the relatively high exchange rate of the Hong Kong dollar against the renminbi has dampened their shopping and traveling desire.
• Online sales, which accounted for 7.8% of total sales in July, climbed 1% YoY to HK$2.3bn. Sales value of sales of books, newspapers, stationery and gifts surged 26.1% YoY, while the value of sales of medicines and cosmetics jumped by 3.5%. In contrast, the sales value of motor vehicles and parts plummeted 27.9% YoY, following a 25% decline in jewelry, watches, and valuable gifts, and a 24.9% fall in Chinese drugs and herbs.