Hong Kong June retail sales plunge 24.8% as spending, tourism evaporate

HONG KONG (Reuters) - Hong Kong’s retail sales plunged 24.8% in June from a year earlier, falling for the 17th consecutive month as the coronavirus pandemic slammed the brakes on tourism and spending in the city.

Small, sporadic anti-government protests have also weighed on business activity in the Chinese-ruled financial hub, where the virus has pushed many retailers and restaurant operators to the brink of collapse.

Sales dropped to HK$26.5 billion ($3.42 billion), government data showed on Thursday. In May, they tumbled by a revised 32.9% in value.

In volume terms, June retail sales fell 25.4%, compared with a revised 34% in May.

The government said the decline in June moderated further as the epidemic situation abated in the month.

“The operating environment for the retail trade has turned more austere again,” a government spokesman said, however.

This was because inbound tourism remained at a standstill and consumption in the territory was hit by the surge in virus cases in July, bringing a tightening in social distancing measures, he added.

For the first half of 2020, the value of total retail sales fell 33.3%, and 34.9% by volume, from the corresponding 2019 period.

For the second quarter, the value of retail sales rose 4.0% over the preceding quarter, while volume increased 5.2%.

Hong Kong’s economy posted its fourth consecutive quarterly year-on-year drop in the second quarter, while the city’s biggest retailer association estimated that 15,000 retail stores will close by year end, and urged rental relief by landlords.

Business consultancy PwC has estimated that Hong Kong retail sales will shrink 19.7% for the entire year in 2020.

Hong Kong’s tourist arrivals in June plunged 99.7% from a year earlier to 14,606 visitors, the tourism board said, compared with a drop of 99.9% in May.

Sales of jewellery, watches, clocks and valuable gifts, which depend heavily on mainland tourists, sank 56.5% in June, compared with a revised 69.9% plunge in May. Sales fell 65.5% for the January to June period.

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Reporting by Donny Kwok and Twinnie Siu; Editing by Clarence Fernandez