Hong Kong: Decline in retail sales softens in May but remains marked
Retail sales dropped 12.8% in year-on-year terms in May, which was above April’s 16.5% decrease. The smaller contraction was due to more moderate falls in sales of food and alcoholic beverages, jewelry, watches and valuables, and clothing and footwear. Meanwhile, annual average retail sales growth fell to 2.8% in May (April: +5.3%), which marked an over one-year low.
A high base effect, the strong Hong Kong dollar—due to the currency’s peg to the U.S. dollar—and residents’ growing penchant for shopping on the mainland likely all weighed on spending in May. As a result, Hong Kong retail sales continued to languish well below their pre-Covid-19 levels, and retail sales data for April and May bodes poorly for the overall private consumption outturn for Q2.