Hong Kong’s retail sales in June experienced a decline due to reduced local spending and the strength of the local currency, according to the Census and Statistics Department. Sales of jewelry, watches, clocks, and valuable gifts dropped by 23% year-on-year to HKD 4.28 billion ($547.3 million) for the month. Overall retail sales across all categories fell by 10% to HKD 29.87 billion ($3.82 billion). In May, there were similar declines with hard luxury sales down 21% and overall retail sales down 11%.
The decrease is partly attributed to a tough comparison with the same period last year, when the reopening of the border between China and Hong Kong boosted tourism significantly. Much of Hong Kong’s luxury revenue comes from visitors, especially those from mainland China.
Additionally, spending trends are changing. Previously strong domestic spending and purchases from mainland tourists have shifted, with many Chinese and Hong Kong buyers now preferring to spend abroad, particularly in Europe and Japan. The strength of the Hong Kong dollar relative to other tourist currencies has also impacted sales negatively.
A government spokesperson noted, “The total retail sales value continued to decline in June compared to last year due to changing consumption patterns among visitors and residents, and the strong Hong Kong dollar.”
In the first half of the year, sales of hard luxury goods fell by 13% to HKD 26.51 billion ($3.39 billion), while overall retail sales decreased by 7% to HKD 191.45 billion ($24.5 billion).
Looking forward, the government anticipates ongoing challenges in the retail sector in the short term but remains optimistic about potential improvements. “The retail sector will face challenges in the near term,” the spokesperson acknowledged, “however, the government’s initiatives aimed at benefiting Hong Kong, coupled with efforts to promote economic growth and support the local retail sector, are expected to provide relief. Moreover, continued economic growth and rising employment earnings should also bolster the retail sector.”
