Tourism surge, specialty retail drive China’s 5.7% CNY sales growth

However, mass-market malls saw traffic down 3.9% YoY.

Mainland China’s retail sales grew 5.7% year-on-year during the Chinese New Year (CNY) holiday, according to a report by Jefferies.

Average daily retail sales improved compared with growth rates recorded during the National Day holiday and last year’s Chinese New Year period.

Traffic volume and retail sales across 78 key monitored commercial zones rose 6.7% and 7.5% year-on-year, respectively, indicating resilient holiday consumption.

Domestic trips hit 5.96 billion (+19% YoY) and tourism spending reached RMB 803.5 billion (+18.7% YoY). Average daily spending per person fell 11% to RMB 150.

In Eastern China, 140 malls saw foot traffic drop 3.9% and sales fall 2.5% YoY.

Specialty retailers like Pop Mart and premium dining such as Haidilao grew, while gold, jewellery, and apparel declined due to warm weather.

Jefferies expects same-store sales trends to have been subdued for most gold and jewellery brands during the CNY period, with the exception of Laopu. Fluctuations in gold prices weighed on demand for gold jewellery sold by weight, though fixed-price gold products benefited from price volatility.

Moreover, it also maintains a relatively constructive stance on traditional consumer segments, including ready-to-drink beverages, breweries, restaurants, and hypermarkets.

However, the firm cautioned that these categories may face challenging year-on-year comparisons in the first half of 2026, following the implementation of anti-extravagance policies in May and e-commerce platform subsidies in June and July.

It noted that most traditional consumer stocks are currently trading at low-to-mid-teens 2026 forward price-to-earnings ratios, offering dividend yields of 4% to 6%.

“The valuation reflects dismal expectations for the trading environment,” the report said. “Should there be more signs of improvement in the mass consumer segment, Jefferies could see a re-rating with earnings upside.”