Hong Kong retail sales edge up amid changes in consumer spending patterns

Hong Kong's retail sales saw a modest year-on-year increase in the first two months of 2024 despite shifting consumer spending patterns and the evolving retail sector landscape, according to official data, 

The government’s provisional figures showed on Wednesday that the total retail sales value was provisionally estimated at HK$33.8 billion in February, marking a 1.9% increase from the same period last year. Revised estimated data for January showed a year-on-year increase of 0.9%. 

Retail sales value increased by 1.4% in the first two months of 2024 compared to the same period last year, while online retail sales decreased by 15.9% in the same period in 2023.

Kevin Kim, 28, a research analyst at Hong Kong Shanghai Banking Corporation, explained that the decrease in online retail sales could be attributed to several factors.

“One possibility is that consumers have begun to prefer shopping at traditional retail stores, which could be a rebound from the increased online shopping activities during the pandemic. Additionally, intensified competition in certain online marketplaces may have also played a role,” he said.

After adjusting for price changes, the volume of total retail sales in February recorded a year-on-year increase of 0.5%. Nonetheless, when January and February 2024 were considered together, a decrease of 0.4% in volume was observed, indicating a nuanced recovery in retail sector performance.

“It should be noted that retail sales tend to show greater volatility in the first two months of a year due to the timing of the Lunar New Year,” the government said in the press release. “... It is more appropriate to analyse the retail sales figures for January and February taken together in making a year-on-year comparison.”

For significant types of retail outlets, the first two months of 2024 saw 8.8% increases in sales of jewellery, watches, clocks, and valuable gifts. 

On the contrary, the value of sales of electrical goods and other consumer durable goods not classified elsewhere decreased by 25.1% in the first two months of 2024 compared to the same period a year earlier.

A government spokesperson highlighted the modest growth in retail sales value for the early months of 2024 and projected a positive outlook for the sector. 

“As handling capacity continues to recover, and more mega events are staged, inbound tourism is expected to revive further and benefit the retail sector,” he said. “Rising household income and the Government's initiatives in boosting consumption sentiment should also provide support.” 

However, he added, evolving consumption patterns of residents and visitors continue to pose challenges, warranting close government monitoring.