Amid months of ongoing pro-democracy protests, Hong Kong holiday shopping sales took a hit during the fourth quarter and for December in particular.
The Hong Kong Census and Statistics Department today reported slumping sales for December 2019 as tourists were leery of visiting and would-be shoppers remained in their homes. As a result, Q4 retail sales tumbled 24.1% year over year to mark the largest quarterly decline on record.
For the 2019 fiscal year, retail sales were estimated to have declined 11.1% to $431.2 billion, representing a 12.3% decline in volume year over year.
The sluggish sales come amid a plunge in tourism in the territory, the result of months of pro-democracy protests and social unrest. Data released in January by the Hong Kong Tourism Board showed that the number of visitors over the last six months of 2019 plummeted by 39%, compared with the same period of the previous year. Further, a report released in December by the Hong Kong Retail Management Association estimates that 7,000 of the territory’s 64,000 retail locations will be forced to shut down in the first half of 2020. Ninety-seven percent of retailers surveyed by HKRMA said they had experienced financial losses since the beginning of the protests, and 57% said the drops had been severe.
Among the sectors expected to see significant impact as the unrest drags on is luxury fashion; analysts estimate that Hong Kong accounts for between 5% and 10% of global luxury goods sales. Several luxury fashion labels have reportedly considered shuttering their doors in the region, among them Louis Vuitton and Prada.
Meanwhile, during retail’s all-important holiday sales period, the Census and Statistics Department reported today that apparel revenues fell 22.1% in December, while shoe and accessories sales fell by 20.4%.
According to a Hong Kong government official, the impact of the protests on shopping and tourism remains severe. The effects have been compounded, the official added, by fears of coronavirus. The virus, which causes pneumonialike symptoms, originated in China this December. So far, it has killed 427 people globally and infected over 20,000; one death has been confirmed in Hong Kong with 17 others have been diagnosed with coronavirus.
Hong Kong officials say the short-term outlook for retail sales “depends critically” on how coronavirus progresses.