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A notice on the metal shutter of a shop on Tung Choi Street in Mong Kok, Hong Kong, indicates the shop"s closure due a planned march by protesters, Aug 3, 2019. [PHOTO/CHINA DAILY]

Hong Kong"s retail sales recorded their steepest year-on-year decline on record for a single month in August this year — plunging 23 percent to HK$29.4 billion ($3.77 billion) — compared with the same period a year ago, statistics showed on Wednesday.

The Hong Kong Retail Management Association warned this may not be the worst, saying it"s possible that local retail sales to be assessed would be worse than in August and September, with 30 to 80 percent of shops forced to close on Oct 1 amid violent protests.

Annie Yau Tse On-yee, chairperson of the association, said that with a higher probability of shops closing, the retail sector"s business may deteriorate, and there"s no hint it could rebound.

The extreme and violent acts of rioters on Tuesday forced up to 80 percent of shops to put up the shutters. According to the HKRMA, a prominent cosmetics company closed down its entire chain of shops on National Day — a traditional peak day for the business.

A revised estimate put the value of Hong Kong"s total retail sales for July down by 11.5 percent compared with a year earlier. For the first eight months of 2019, the value of total retail sales dropped 6 percent, compared with the same period in 2018.

August"s 23 percent plunge in retail sales was the worst Hong Kong has seen. A government spokesman said it was worse than that recorded during the Asian financial crisis in September 1998.

The total value of sales of jewelry, watches and clocks, as well as valuable gifts, plummeted 47.4 percent in August this year, from the same period a year ago. Sales of medicines and cosmetics were down by 30 percent, and those of wearing apparel declined 33.4 percent. The sales value of footwear, allied products and other clothing accessories dropped 26 percent year-on-year.

Apart from weak consumer sentiment in a subdued economy, the retail-sales plunge in August was due mainly to the severe disruption to inbound tourism and consumption-related activities caused by the social unrest, the spokesman said.

Total tourist arrivals in August plunged 39 percent to 3.59 million, compared with the same period last year, according to the Hong Kong Tourism Board. The number of Chinese mainland visitors dwindled by 42 percent year-on-year to 2.78 million.

To alleviate the pressure on the local retail industry, the Hong Kong SAR government has introduced incentives, such as rental cuts, for shop owners. But the HKRMA said the number of shop owners benefiting from the measures is small as most shops have leases with private developers. The association urged property developers to help troubled businesses ride out the storm.

Retail sales are likely to remain in the doldrums in the near term as a gloomy economic outlook and the ongoing protests are expected to further dent consumer sentiment and inbound tourism.

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