Stores in Hong Kong see dwindling patrons amid the riots. Photo: VCG
Many stores close early before Tuesday’s riots in Hong Kong. Photo: Chen Qingqing/GT
Amid ongoing riots, Hong Kong recorded a 23 percent year-on-year decrease in its total retail sales in August, registering the steepest year-on-year decline for a single month on record, according to official data released Wednesday.
The sharp decline also reflected continuous struggles that small- and medium-sized enterprises or SMEs in the city have been facing over past few months due to escalating violence.
The value of total retail sales slumped 23 percent in August, and decreased 6 percent from January to August, both on year-on-year basis. Sales of jewelry and watches saw the most falls, followed by sales of food, drinks and tobacco.
The sharp downturn in Hong Kong’s retail registered the steepest year-on-year decline for a single month on record, even worse than that recorded in September 1998 during the Asian Financial Crisis, according to a government spokesperson.
Rioters set fires on Tuesday in Hong Kong. Photo: AFP
As part of services sector, retail accounted for 4 percent of the city’s total GDP in 2017, the official data showed.
“Such significant downturn followed continuous social unrest, which affected not only in-bound tourism but also local consumption mood,” Shiu Ka-fai, a Hong Kong lawmaker who represents wholesale and retail, told the Global Times on Wednesday.
The spreading citywide violence forced businesses to close early, disrupted public transport, and made Hong Kong’s streets dangerous. “Local residents have become more unwilling to consume,” he said.
As rioting activities took place throughout Hong Kong on Tuesday, businesses ranging from small stores to major shopping malls in Causeway Bay and Admiralty closed at noon. Some radicals had spread rumors online that they would commit arson in shopping malls, prompting at least 23 malls along MTR lines to suspend business, according to local media .
Some stores were vandalized and damaged by rioters retaliating against local support for the police. Some stores under or franchised by Maxim’s Group including Starbucks and Yoshinoya have been broken into and vandalized. Rioters have damaged ATM machines of Chinese bank branches.
The Hong Kong General Chamber of Commerce strongly condemned the violence and vandalism as the city descended into chaos on Tuesday. Many shops, restaurants and business were targeted by extremists and vandals, while thousands of others were forced to close, it said in a statement on Wednesday.
The priority now is to stop the violence, Shiu said, noting that the government should also come up with more effective measures to support SMEs.
Retail sales will likely remain in the doldrums in the near term, as the worsened economic outlook and violent protesters continue to weigh on consumer sentiment and curb tourism, the government spokesperson said.