February 18, 2022
HONG KONG – While Hong Kong’s retail sales recorded a double-digit slump after tightened social distancing rules amid the fifth wave of the pandemic, the Hong Kong Retail Management Association announced a recent survey result on Thursday, calling for more support from proprietors and the special administrative region’s government.
The industry has been under pressure since social protest activities in 2019, the association noted. The result revealed a third consecutive drop in retail sales in Hong Kong compared with 2018. In 2020, total sales fell by 33 percent compared with 2018 to HK$326.5 billion ($41.85 billion), recording a historical low.
The HKRMA predicts there will be a further decline after the vaccine passes come into effect on Feb 24, with about 70 percent of interviewees forecasting an over 50 percent drop in business for retail stores in shopping malls
From Feb 14 to 16, the association interviewed over 22 companies which included 3,900 retail shops and 74,000 employees in total. Eighty percent of interviewed companies recorded a drop in sales in the first two months of 2022, compared with the same period two years ago. Forty percent of respondents saw a 40 percent drop in sales.
The HKRMA predicts there will be a further decline after the vaccine passes come into effect on Feb 24, with about 70 percent of interviewees forecasting an over 50 percent drop in business for retail stores in shopping malls. About 80 percent of companies believe the sales in retail shops on the street will also slip, but more mildly than in malls.
“The rent for retail shops is vital for the industry as it occupies the largest of the costs,” said Annie Tse Yau On-yee, HKRMA’s chairwoman. “But few of our respondents received support from the proprietors.”
According to the survey, nearly 70 percent of interviewed companies said they have not received any reductions in rent from proprietors. Only 30 percent of companies have got rent reductions ranging from 10 percent to 40 percent.
The association suggested the Hong Kong government give more support to the retail industry, which could cover asking developers to provide rent relief for tenants, including the sector in a new round of the Anti-epidemic Fund, as well as rolling out electronic consumption vouchers soon after the current wave subsides.
“We hope the government and proprietors stand together with us to overcome the difficulties,” said Tse.