Total retail sales in June dropped 9.7 percent compared to a year ago, as the slowdown of the Chinese economy at large has dampened tourist spending in Hong Kong (in this case those visitors to Hong Kong from mainland China).
The economic indicators in Hong Kong are compounding the results of a Chinese economy that’s been slowing for 18 months. While the unemployment rate is stable at 3.2%, wages have not been growing. Consumer confidence is flat to declining, and the overhang of the slowing Chinese economy is impacting Hong Kong retailers.
Jewellery sales are particularly important to watch in Hong Kong—they represent 23 percent of total spending in Hong Kong compared to only 1 percent in the US. In each of the past three months, jewellery sales have declined by double digits year over year, with declines in May and June of over 20 percent. Some of this decline is due to the changes in the gifting policy of the government, but these meaningful decelerations are having a negative impact on total retail sales in Hong Kong.
adapted from MasterCard Advisors
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