Hong Kong Retail Slump Eases as New Virus Wave Threat Looms
Hong Kong Retail Slump Eases as New Virus Wave Threat Looms
(Bloomberg) -- Hong Kong’s subdued retail environment showed signs of improvement in October, though a new wave of virus cases threatens that progress as the city tightened social-distancing rules again.
Retail sales by value fell 8.8% from a year earlier to HK$27.4 billion ($3.5 billion), better than the median forecast of -10.3% in a Bloomberg survey of economists, and compared with a revised -12.8% in September. Sales by volume fell 9.3%.
A resurgent wave of infections and new social-distancing restrictions, however, threaten to upend the nascent signs of an economic recovery. The new virus cases have already forced Hong Kong to delay a travel bubble with Singapore and worsens pressure on retailers ahead of the critical December shopping season.
“With the fourth wave of the local epidemic spreading widely and quickly, the business environment of the retail trade may deteriorate again in the near term,” the government said in its report Tuesday.
Sales by value of electrical goods and other consumer durables dropped almost 25% from a year ago, while food, alcohol and tobacco sales declined 6.5%. On the other hand, sales of goods in supermarkets rose 2.6%.
Chief Executive Carrie Lam this week announced further mobility restrictions, including reducing public gatherings to two people, closing nightclubs and karaoke parlors and cracking down on parties aboard yachts in order to bring the latest virus wave under control. Schools will shut again from Wednesday.
Lam’s delayed policy address, delivered last week, was also light on virus support measures after allocating more than HK$310 billion in stimulus so far this year. One of the few relief items announced was HK$600 million earmarked for the tourism sector.
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