From the latest retail sales figures of December 2019 released by the Government, the total Retail Sales Value (RSV) registered a year-on-year drop of -19.4% to HK$36.2 billion. For the fourth quarter of 2019, the total RSV decreased by -24.1% which is the largest quarterly decline on record. Being compensated by the relatively normal sales performance in the first half of 2019, the sales decline of the entire year concluded at -11.1%.
The retail industry has been suffering from unprecedented devastation caused by the prolonged social unrest since June 2019. The uncertain prospect brought by the recent outbreak of the novel coronavirus poses another severe blow to our industry. In the near term, the industry will hinge on not only local social incidents but also the development of this local and global public health emergency.
The Association conducted a survey among members to assess the initial impact of the coronavirus woes during the first 10 days of the festive Chinese Lunar New Year, i.e., from 24 January to 2 February 2020 inclusive. Most of the retail categories registered an average of -30% to -50% sales drop, with the most severe decline at around -90%. These figures indicate an extremely pessimistic business outlook in the coming months. Against this backdrop, the Association forecasts that the total RSV for the first half of 2020 would decrease by mid double digits, ranging from -30% to -50%, with certain categories declining even worse than the average.
Since the epidemic outbreak, the Association has been persistently reflecting the industry’s devastation to all stakeholders, especially commercial landlords. Earlier this month, the Association joined the Retail Alliance spearheaded by Mr. Peter Shiu, LegCo Councilor of Wholesale and Retail Functional Constituency. Together with retail trade leaders and over 100 trade associations, we urged major landlords to waive the rent for February 2020 and to charge turnover rent only without base rent from March to June 2020.
The Association welcomes the Government’s latest announcement of a HK$30 billion funding to tide over the coronavirus situation, of which HK$5.6 billion will be dedicated to assisting retailers. Moreover, we have submitted our recommendations to the Financial Secretary regarding some practical measures that could help alleviate financial burdens of most retailers and enterprises immediately. Facing this unexpected epidemic outbreak, we have been keeping the media updated on the survival of our industry, which could raise the public’s awareness of retailers’ hardships and the importance of our urge to all commercial landlords regarding rental reductions.
Last but not least, the Associations’ latest quarterly newsletter “Retailers” is now available on our website for viewing. We sincerely hope that Hong Kong could recover from the epidemic soon so that our normal daily life could be resumed. Once again, may I wish you all very good health and lots of energy for facing all challenges ahead!
