Sales for 2008 climbed 10.5 percent by value and 5 percent by volume.
"Part of the better-than-expected retail sales report is likely due to less outbound travel during the Christmas vacation, which was discouraged by the gloomy outlook," said JPMorgan analyst Qian Wang. "In addition, large sales promotions in recent months may have stimulated household purchases, at the expense of future sales."
December sales volume of clothing rose 1.1 percent year on year, and that of department stores improved 1.5 percent. But sales volume of luxury goods dropped further by 9.8 percent, from November's decline of 3.7 percent.
The government said the improved sales volume, with the decline narrowed to 0.7 percent from 2.7 percent as of November, came amid stabilization in inbound tourism and local spending.
The Hong Kong Retail Management Association said the sales figures were far better than its forecast of a decline of 3-5 percent by value.
"Mainland tourists contributed about 20-30 percent of retail sales in the SAR," said association chairwoman Caroline Mak Sui-king. She said the cool and dry weather during Christmas helped the retail market as well.
Meanwhile, restaurant receipts in the fourth quarter rose 8.3 percent by value and 2.6 percent by volume. "The unexpected growth was mainly because of cutthroat promotions like the HK$1 campaign, and more people stayed in the city," said Hong Kong Federation of Restaurants and Related Trades chairman Anthony Lock Kwok-on.
Receipts of Chinese restaurants reported the highest growth of 9.9 percent by value and 3.9 percent by volume. Fast food outlets gained 8.6 percent and 2.7 percent. Lock said federation members recorded sales growth of 5 to 8 percent during the Lunar New Year, compared with last year, while that of fast food chains and cha chan tengs jumped 10 percent.
