Protests Weigh on Hong Kong Retail

RAPAPORT... Hong Kong luxury retail sales fell sharply in July, affected by continuedprotests in the city and an escalation in the US-China trade war. Revenue from jewelry, watches, clocks and other valuablegifts dropped 24% year on year to HKD 5.49 billion ($700.4 million) during the month, themunicipality's Census and Statistics Department reported last week. Sales across all retail categories slipped 11% to HKD 34.43 billion ($4.39 billion). Luxury stores have been forced to shut down due to demonstrations against an extradition bill that began in June. Hong Kong has also suffered a drop in tourism as shoppers from mainland China, who usually travel to the municipality to purchase luxury goods faced airport strikes and transportation closures. The number of tourists visiting the Hong Kong was down 5% to 5.2 million in July, the Hong Kong Tourism Board reported. Of those, 4.2 million came from mainland China, a decline of 6% over the same period last year. "Retail sales worsened further to post a double-digit...fallin July, reflecting the weak local consumer sentiment and significantdisruptions to inbound tourism and consumption-related activities arising fromthe recent local social incidents," a government spokesperson noted. The government expects weakness in the market to continue,as conditions persist, it explained. "Escalated US-[China] trade tensions and subdued economicconditions continue to dampen consumer sentiment," the spokesperson added. "Thesituation may even deteriorate further if the social incidents involvingviolence do not come to a stop." In the first seven months of the year, retail sales of jewelry, watches, clocks and other valuablegifts decreased 9% to HKD 46.11 billion ($5.88 billion). Sales in all retail categories for the January-to-Julyperiod fell 3.8% to HKD 275.72 billion ($35.16 billion). In July, the number of tourists visiting Hong Kong was down5% to 5.2 million, the Hong Kong Tourism Board reported. Of those, 4.2 millioncame from mainland China, a decline of 6% over the same period last year. Image: Protesters at Hong Kong international airport. (shutterstock)