Trade Fears Weigh on Hong Kong Retail

RAPAPORT... Retail sales of jewelry and other luxury items fell sharplyin Hong Kong in June amid increasingly cautious consumer sentiment and aslowdown in tourism. Revenue from jewelry, watches, clocks and other valuablegifts dropped 17% year on year to HKD 5.75 billion ($734.4 million), themunicipality's Census and Statistics Department reported last week. Sales inall retail categories slipped 7% to HKD 35.21 billion ($4.5 billion). Tourists from mainland China are major consumers ofluxury goods in Hong Kong. Continued economic uncertainty due to fears about tariffs on trade between the US and China has caused tourism to decline, affecting sales, advisory firm PricewaterhouseCoopers said last month. In addition, demonstrations against an extradition bill have also dented luxury sales. The government expects the decline to continue if the protests inthe municipality persist. "Retail sales registered an enlarged decline in June, aslocal consumer sentiment turned more cautious and growth in visitor arrivalsmoderated," a government spokesperson noted. "The near-term performance ofretail sales will likely remain subdued, as the weakened global and localeconomic outlook and other headwinds continue to weigh on consumptionsentiment. The recent mass demonstrations, if continued, would also dent theretail business further." Retail sales of jewelry, watches, clocks and other valuablegifts decreased 7% to HKD 40.62 billion ($5.19 billion) in the first half ofthe year. Sales in all retail categories for the January-to-June period fell2.6% to HKD 241.27 billion ($30.81 billion). In June, the number of tourists visiting Hong Kong rose 9%to 5.1 million, the Hong Kong Tourism Board reported, compared to 14% growth for the first half of the year combined. Image: Shopping area on Percival Street in Hong Kong. (Gelo71)