HONG KONG (Reuters) - Hong Kong’s retail sales extended their freefall in December as months of often violent anti-government protests scared off tourists and shoppers, hitting spending and threatening the survival of many businesses.
Over the festive period, protesters roamed through prime shopping malls and clashed with police, forcing many stores to close early on repeated occasions.
Retail sales in December fell 19.4% from a year earlier, government data showed on Tuesday, against a revised 23.7% drop in November and a 24.4% fall in October, which was the steepest on record.
For the whole of 2019, sales fell 11.1% from a year earlier to HK$431.2 billion ($55.51 billion). Volume fell 12.3%.
Analysts say the figures are likely to get worse in coming months as a new coronavirus outbreak in mainland China has emptied shopping centers and closed down tourist attractions. Hong Kong, which relies heavily on spending by mainland visitors, has taken measures to reduce the flow of people crossing the border.
Retail sales fell to HK$36.2 billion in December, the 11th consecutive month of decline. In volume terms, retail sales in December fell 21.0%, compared with a revised 25.5% drop in November.
“The business environment for retail trade has become even more difficult recently, with the threat of the novel coronavirus infection heavily weighing on inbound tourism and local consumption sentiment,” a government spokesman said.
Hong Kong sank into recession for the first time in a decade last year, as the city plunged into its worst crisis since it reverted from British to Chinese rule in 1997.
Tourist arrivals in Hong Kong plunged 51.5% year-on-year in December, compared with a 55.9% plunge in November, which was the steepest fall since May 2003 - when the city was hit by an outbreak of the Severe Acute Respiratory Syndrome (SARS) epidemic.
December tourist arrivals fell to 3.2 million, according to the Hong Kong Tourism Board.
The number of mainland visitors fell 53.2% in December to 2.4 million.
Many businesses have felt the pain, especially some of the city’s large luxury retailers who rely heavily on mainland Chinese spending, as the protests show no signs of easing.
Sales of jewelry, watches, clocks and valuable gifts plunged 36.7% on-year in December, compared with a 43.5% drop in November, data showed. Medicines and cosmetics fell 29.9%, while department store sales dropped 25.3%.
The Hong Kong Retail Management Association (HKRMA) estimates about 7,000 businesses, or more than one in 10 retailers, will be forced to close in the next six months. HKRMA has urged landlords to cut rents.
Reporting by Donny Kwok and Twinnie Siu; Editing by Marius Zaharia and Alex Richardson