Financial News
Written by: Xu Shihao
2021-01-25 12:32
Last update date: 2021-01-25 12:32
Due to the repeated effects of the new crown epidemic, it is difficult for tourists to come to Hong Kong in the short term. The Hong Kong Retail Management Association stated that it is pessimistic about the retail market in the first half of this year. It is expected that the operating environment will be very severe. With the outbreak of the fifth wave of the epidemic and the absence of border clearance, it is estimated that the total retail sales in the first half of the year will be about the same as the same period last year, and the performance will be roughly the same, or there may be a chance to record a positive and negative single-digit rise and fall.
However, the performance of individual retail categories will be different. Certain categories that are more severely affected by social distancing measures may experience double-digit declines. It is also emphasized that if the fifth wave of epidemic occurs, the retail market will become worse this year.
The association will closely monitor and adjust the sales forecast.
Compared with the first half of 2019, a drop of 30%
The Association believes that the outbreak of the epidemic for more than a year and the sluggish retail market last year resulted in a low base effect, which failed to accurately reflect the sharp decline in business. It believes that this year's retail data must be compared with the relatively normal period of 2019 and 2018. .
Therefore, if the first half of this year is the same as last year, the total retail sales will fall by two to thirty percent compared to the same period in 2019 (ie a normal year). Compared with the first half of 2018, the decline will be as high as three and a half.
The association also pointed out that retailers’ current operating costs, especially rent and employee salaries, remain at the levels of 2018 and 2019, which means that retailers’ income has dropped significantly, but they still have to pay high expenses, resulting in many stores experiencing losses. With the completion of the government's "Employment Guarantee Program" subsidy, participating companies no longer have to abide by the promise of no layoffs. There will be a wave of layoffs and bankruptcies in the retail industry, and a large number of store employees may face unemployment.
Traditional shopping areas lose their appeal
On the other hand, the association worries that traditional shopping areas such as Tsim Sha Tsui, Causeway Bay and Mong Kok will have a large number of kyat shops, which will not be as prosperous as before and the attraction will be greatly reduced.
Due to the continued weakness of the U.S. dollar, retailers are bound to increase the cost of goods sold, especially those from Europe, especially the mainland.
However, in the face of weak consumer confidence in the public, retailers also have to reduce prices significantly. This is undoubtedly a double blow to retailers.
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Hong Kong Retail Management Association