Hong Kong’s retail market contracts as locals travel abroad

Total retail sales value fell 11.8% to $29.1b in July.

Hong Kong’s retail market continued to contract as more locals travel abroad, according to Knight Frank.

Total retail sales value plunged 11.8% year-on-year (YoY) to $29.1b in July 2024, marking the fourth consecutive month of decline.

Tourism-oriented trades, including jewellery (-25%); clothing, footwear and allied products (-16.8 %); and department stores (-24.3 %) are the top three outlets to suffer a double-digit decline.

In terms of retail asset investment, Knight Frank observed more sales activity on prime retail streets, but overall market sentiment remains subdued.

“Retail sales performance for the remainder of 2024 is expected to remain soft. Nonetheless, the gradual recovery of the macroeconomic environment, given the easing of global interest rates, a potential rebound of the renminbi and the influx of top talent may provide a glimpse of hope for the retail sector,” Knight Frank said.

In line with this, developers are showing more flexibility in rent negotiations to secure high occupancy rates.