Hong Kong retail sales extended their free-fall in November as months of anti-government protests scared off tourists, hitting spending and threatening the survival of small businesses.
Sales fell 23.6 per cent from a year earlier to HK$30-billion (US$3.85-billion), government data showed on Friday. It was the tenth consecutive month of declines and compared with a revised 24.4 per cent drop in October, which was the steepest on record.
As sometimes violent protests spread across various shopping districts, many retail operators, from prime shopping malls to family-run businesses, have been forced to close early or for entire days over the past few months.
In volume terms, retail sales fell 25.4 per cent, compared with a revised 26.4 per cent drop in October.
“The near-term outlook for the retail trade continues to hinge on how the local social incidents will evolve,” a government spokesman said.
“As such, ending violence and restoring social order are essential to the recovery of the retail trade and indeed that of the whole economy.”
Hong Kong sank into recession for the first time in a decade in the third quarter, as the protests plunged the city into its worst crisis since it reverted from British to Chinese rule in 1997.
Paul Chan, the city’s financial secretary, said on Sunday that a contraction in the fourth quarter was “unavoidable” and the budget in February would focus on boosting the economy.
Tourist arrivals in Hong Kong plunged 55.9 per cent year-on-year in November, the steepest fall since May 2003, when the city was hit by an outbreak of severe acute respiratory syndrome (SARS).
November tourist arrivals fell to 2.65 million, according to the Hong Kong Tourism Board. That compared with a 43.7 per cent plunge in October.
The number of mainland visitors fell 58.4 per cent in November to 1.93 million, accounting for 72.8 per cent of arrivals.
High-end retailers who rely heavily on mainland Chinese spending, have been particularly hard hit.
Sales of jewellery, watches, clocks and valuable gifts plunged 43.5 per cent on-year in November compared with a revised 43 per cent drop in October, data showed. Medicines and cosmetics fell 33.4 per cent, while department store sales dropped 32.9 per cent.
The Hong Kong Retail Management Association (HKMA) estimates about 7,000 businesses, or more than one in 10 retailers, will be forced to close in the next six months.
HKRMA has called for more government relief measures and urged landlords to cut rents.