Hong Kong: Retail sales rebound tepidly in July
Retail sales expanded 0.9% year on year in July (June: -4.3% yoy). The rebound was largely driven by softer falls in clothing and fuel sales, and renewed growth in jewelry and department stores sales. In contrast, food sales fell at a sharper rate.
Retail sales in July were supported by an improving labor market and a favorable base effect. However, the annual increase was still subdued, likely a reflection of a declining population and consumer caution in the face of a renewed uptick in Covid-19 cases. Looking ahead, the distribution of fresh consumption vouchers in August and October should support retail sales, although the pandemic situation could continue to keep a lid on spending.