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Tuesday, November 4, 2014, 09:36

No cheer despite retail sales surge

By Celia Chen and Sophie He
No cheer despite retail sales surge

Small jewelry shops in Mong Kok and Causeway Bay have borne the brunt of Hong Kong’s ongoing street protests, with some registering sales slumps of up to 40 percent. The crunch may also come during the coming Christmas and New Year holiday season if the protests continue unabated.

Hong Kong retailers are highly worried that Christmas sales could be hurt by the ongoing “Occupy Central” protests, while some foreign vendors are talking about closing down their outlets in the city.

Despite a 4.8 percent increase in total retail sales to HK$37.6 billion for September, compared with a year ago,  Caroline Mak, chairperson of the Hong Kong Retail Management Association, warned that the September figures have  yet to reflect the full impact of the “Occupy Central” on local retailers, as the protests didn’t start until late that month.

The city’s retail sales will see a year-on-year decline again in October, Mak predicted at a teleconference on Monday.

“I think it is only the matter of how much they (the retail sales) are going to decline (in October),” she said. “Even under the most optimistic scenario, the growth rate in October is expected to be nil,” she added.

She emphasized that local retailers have become frustrated as they could see no immediate end to the demonstrations that have blocked off several main roads in some of Hong Kong busiest commercial districts for more than a month.

Echoing Mak’s views, Sam Cheuk, president of the Hong Kong General Chamber of Jewellery, told China Daily there is growing concern among members who are worried that the  protests may last beyond Christmas — the most important sales season of the year.

“Some foreign jewelers from Europe, the US and Singapore have said they may withdraw part of their businesses and capital from Hong Kong if the protests do not end by 2014,” said Cheuk.

He pointed out that sales of some large jewelry companies have dropped by 30 to 50 percent since the demonstrations started. Smaller jewelers, who have branches in Mongkok and Causeway Bay, have been  the hardest hit, with sales declining by more than 40 percent in the past couple of months, Cheuk said, adding that even those who have no branches in the affected areas are not doing well either because of decreased customer traffic.

“They also saw their sales dropping by as much as 15 percent as local consumers’ purchase power is weakened and many tourists are staying away from Hong Kong,” he said.

Cheuk said what the jewelers can do to prevent sales from plunging is very limited.  Some are offering deep discounts to lure customers while others have mounted expensive promotion campaigns.

Mak predicted that retail sales for the whole of 2014 will be lower than in 2013. This would be the first year-on-year decline since 2003 when Hong Kong was gripped by the SARS epidemic outbreak.

“Zero growth for 2014 will be our best hope. I expect Hong Kong to see a year-on-year decline in its retail sales in 2014,” said Mak.

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