HK retail sales to decline 6% in 2024

The only sector anticipated to see growth is medicines and cosmetics.

The retail sector in Hong Kong is expected to experience a 6% decline in total retail sales in 2024, totaling $49b (HK$383b), according to a new forecast from PwC.

From January to August 2024, total retail sales value dropped by 8% compared to the same period last year. 

Key categories experiencing significant declines include luxury goods and department stores, both down 16%, along with electrical goods and consumer durables, which fell by 15%. The only sector anticipated to see growth is medicines and cosmetics, projected to increase by 11%.

The report attributes these challenges to global economic uncertainties, geopolitical tensions, and a lackluster performance in Hong Kong's equity and real estate markets. 

Additionally, a recent reduction in the US Federal Reserve's interest rate by 0.5% in September has not provided the expected boost to consumer confidence. Changing consumption patterns, a strong Hong Kong dollar, and diminished demand linked to outbound travel and cross-border shopping in Shenzhen have exacerbated the situation.

Michael WY Cheng, PwC’s Consumer Markets Leader, noted that shifts in consumption patterns amongst Chinese visitors are negatively affecting local retail sales. However, recent government stimulus measures aimed at enhancing consumer confidence may provide some relief in the latter half of the year.