Retail sales in December increased solidly compared with a year earlier, according to the latest figures released by the Census and Statistics Department, continuing a recovery that bodes well for the sector in 2018.
The value of total retail sales in December 2017 -- provisionally estimated at $44.8 billion -- increased by 5.8% over the same month in 2016. December’s uplift followed strong growth in the previous month, with the revised estimate for November showing a 7.6% increase in value compared with a year earlier.
For 2017 as a whole, retail sales resumed modest growth, after a continual decline since 2014, suggesting that the retail recovery is now bedding in.
Sales in December were boosted by improving consumer sentiment amid favourable employment and salary conditions. Unemployment in Hong Kong dropped to under 3% for the first time in almost 20 years in the last quarter of 2017, adding to businesses’ difficulties in hiring staff. Meanwhile, wage growth in the third quarter of 2017 was up 3.3% on a year earlier.
A recovery in tourism numbers has also helped retailers. Total visitor numbers in December were 4.7% higher than the same month in 2016, with visitors from the Mainland up by 7.2%.
The jewellery, watches and clocks, and valuable gifts sector saw the biggest increase in value of sales when comparing December 2017 with December 2016, with a rise of 6.3%. This was followed by sales of apparel (+6.5% in value); commodities in department stores (+4%); medicines and cosmetics (+11.4%); and food, alcoholic drinks and tobacco (+1.1%).
Not all categories saw an uptick, however. The value of sales of commodities in supermarkets decreased by 2.8% in December compared with a year earlier, while sales of Chinese drugs and herbs fell by 6.6% in value.
For 2017 as a whole, the value of total retail sales was provisionally estimated at $446.1 billion, increasing by 2.2% in value and 1.9% in volume over 2016.
The value of sales of jewellery, watches and clocks, and valuable gifts also came out top when comparing the whole year of 2017 with 2016, increasing by 5.2%. This was followed by sales of apparel (+0.6% in value); commodities in department stores (+3.4%); medicines and cosmetics (+5.5%); and food, alcoholic drinks and tobacco (+3.2%)
On the other hand, the value of sales of commodities in supermarkets decreased by 0.2% in 2017 overall compared with 2016. This was followed by sales of electrical goods and photographic equipment (-9% in value); miscellaneous consumer durable goods (-1.8%); and footwear, allied products and other clothing accessories (-2.1%).
Overall, the outlook for retail remains positive, given the stable economic conditions in Hong Kong and our key markets as 2018 gets under way. We expect that the tight job market will continue to support earnings growth and buoy consumer confidence, while the ongoing recovery in tourism will also boost retail sales in the near term.
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