Hong Kong’s retail industry will experience mixed fortunes in coming months, as rising unemployment threatens to dent consumer spending even as the economy and household incomes improve and tourist numbers surge, according to CBRE.
Retail sales in the city expanded by 2.4 per cent from a year ago to HK$31.3 billion (US$3.99 billion) in May, according to official data, halting a 14-month contraction. The boost was mainly attributed to growth in visitors during mainland China’s Labour Day “golden week” holiday.
The city’s gross domestic product jumped by a stronger than expected 3.1 per cent in the first three months of the year, while tourist arrivals grew 20 per cent in May from a year ago to more than 4 million, according to government data. In the first five months, Hong Kong recorded more than 20 million visitor arrivals, up 12 per cent from a year earlier.
Median household income increased by about 4 per cent to HK$54,000 in the 12 months to March.
“We have more tourists coming to Hong Kong, and we also have the interest rate going down,” Wan said. “The financial market is going up, but at the same time, people are concerned about the uncertain economy. All these mixed signals are really causing retail market turbulence. No one really knows whether it will go positive or negative, and it will change on a daily basis.”