Local fashion retailer Wanko offers a discount of up to 80 percent to boost sales yesterday. CNS
The value of Hong Kong's retail sales in September reached HK$20.9 billion - a 6.9 percent increase over the same period last year even though consumer spending was hit by heavy losses in the stock and property markets amid the global financial crisis, said Census and Statistics Department on its website yesterday.
The city's bench mark Hang Seng Index (HSI) fell 48 percent this year as a global meltdown threatens corporate earnings and jobs. Sales of new apartments may drop this year to the lowest since records started in 1996, according to Centaline Property Agency Ltd.
Joanne Yim, chief economist at Hang Seng Bank, thinks retail business is likely to be stagnant for several quarters. "The negative wealth effects from the stock and property market corrections made consumers more cautious in their spending, as reflected by the sluggish growth in the sales of luxury items."
"The outlook for domestic demand is not optimistic either. The labor market is set to deteriorate rapidly, hitting consumer income and spending," she said.
Spending on footwear and clothing products decreased by 0.2 percent after climbing 4.5 percent, while sales of food, alcoholic drinks and tobacco rose 8.7 percent in September from a year earlier, the government said.
Sales of rice and cooking oil recorded increases because many have decided to cook at home, said Caroline Mak, chairman of Hong Kong Retail Management Association.
"We have seen many retailers bring up Christmas sales promotions earlier than before," she told reporters at a telephone conference yesterday. "Some working suit shops have seen over 20 percent drop in sales, as some retailers may not be able to pay their rents if sales decrease over 20 percent."
"We haven't heard any tenant suffering from serious financial problems but they all urge us to conduct promotion to lure customers to spend," said Winney Leung at promotion and advertising department of Times Square.
Customers can be rewarded with coupons for every HK$100 spent in one of Hong Kong's largest shopping malls. "HK$100 is the lowest requirement we've ever had; we used to set the line at HK$500, but we want to do our very best to whet customers' shopping appetite," said Leung. "We will also make extra effort to adorn the mall with more eye-catching Christmas decorations this year."
After adjusting for inflation, retail sales rose 1.8 percent in September from a year earlier after gaining a revised 3.7 percent in August, the government said.
Hong Kong's economy expanded 4.2 percent in the second quarter, the slowest pace in almost five years, as exports and domestic demand cooled down. Growth will probably slow down to between 4 percent and 5 percent this year from 6.4 percent in 2007, the government forecasts.
Jobless rate climbed to 3.4 percent in the three months through September 30 from the lowest level in a decade, as companies cut back on hiring.
Retail sales in August were HK$22.8 billion, a 10.4 percent increase by value.
