Hong Kong Retail Sales Grew at a Slow Rate in September

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The Census and Statistics Department (C&SD) of Hong Kong has released the latest figures on retail sales today (November 1). The value of total retail sales in September 2018 provisionally estimated at $36.6 billion, increased by 2.4 per cent over the same month in 2017. The revised estimate of the value of total retail sales in August 2018 increased by 9.4 per cent over a year earlier. For the first nine months of 2018, it was provisionally estimated that the value of total retail sales increased by 11.1 per cent over the same period in 2017.

After netting out the effect of price changes over the same period, the provisional estimate of the volume of total retail sales in September 2018 increased by 1.4 per cent over a year earlier. The revised estimate of the volume of total retail sales in August 2018 increased by 7.9 per cent over a year earlier. For the first nine months of 2018, the provisional estimate of the total retail sales increased by 9.6 per cent in volume over the same period in 2017.

Analysed by broad type of retail outlet in descending order of the provisional estimate of the value of sales and comparing September 2018 with September 2017, the value of sales of jewellery, watches and clocks, and valuable gifts increased by 2.2 per cent. This was followed by sales of commodities in supermarkets (+3.6 per cent in value); food, alcoholic drinks and tobacco (+3.2 per cent); commodities in department stores (+2.0 per cent); electrical goods and other consumer durable goods, not elsewhere classified (+4.9 per cent); medicines and cosmetics (+4.9 per cent); other consumer goods, not elsewhere classified (+8.7 per cent); fuels (+6.7 per cent); furniture and fixtures (+1.4 per cent); books, newspapers, stationery and gifts (+8.2 per cent); footwear, allied products and other clothing accessories (+3.4 per cent); and Chinese drugs and herbs (+3.4 per cent).

On the other hand, the value of sales of wearing apparel decreased by 3.8 per cent in September 2018 compared with a year earlier.  This was followed by sales of motor vehicles and parts (-12.4 per cent in value); and optical shops (-6.7 per cent).

Based on the seasonally adjusted series, the provisional estimate of the value of total retail sales decreased by 2.9 per cent in the third quarter of 2018 compared with the preceding quarter, while the provisional estimate of the volume of total retail sales decreased by 3.0 per cent.

These retail sales statistics measure the sales receipts in respect of goods sold by local retail establishments and are primarily intended for gauging the short-term business performance of the local retail sector. They cover consumer spending on goods but not on services (such as those on housing, catering, medical care and health services, transport and communication, financial services, education and entertainment) which account for over 50 per cent of the overall consumer spending. Moreover, they include spending on goods in Hong Kong by visitors but exclude spending outside Hong Kong by Hong Kong residents. Hence they should not be regarded as indicators for measuring overall consumer spending.

A government spokesman indicated that retail sales grew at a decelerated pace in September, partly due to the temporary drag on inbound tourism by typhoon Mangkhut. Local consumer spending may also have been dampened by worries about the US-Mainland trade conflicts and stock market corrections.

The spokesman commented further that, looking forward, favourable labour market conditions and buoyant inbound tourism should continue to support the retail sector in the near term. Yet, external uncertainties and weaker asset markets may increasingly affect consumer sentiment. The Government will closely monitor the situation.

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