Hong Kong retail sales in decline for a third month

Hong Kong retail sales fell 0.1 percent in May in value terms from a year earlier, as slower tourist arrivals hurt sales of big-ticket items such as jewellery and watches.

The city’s retail sector has been hammered by slowing mainland tourist arrivals, tighter visa rules on residents from neighbouring Shenzhen and lower mainland import taxes on some goods.

Retail sales fell to HK$39 billion ($5.03 billion) last month, following a revised 2.1 percent drop in April and a 2.9 percent decline in March. Sales rose 4.6 percent in May by volume.

For the first five months, the value of retail sales fell 1.8 percent from a year earlier, while the volume of retail sales was up 1.3 percent. “The near-term outlook for retail sales will still depend much on the performance of inbound tourism,” the government said in a statement.

The number of mainland visitors to Hong Kong rose 1 percent on year in April, against a 14.7 percent increase a year earlier and a 10 percent drop in March this year, data from Hong Kong Tourism Board shows.

Street tensions, where some groups had staged small but disruptive protests targeting mainland Chinese visitors, appear to have eased after Hong Kong’s legislature vetoed a Beijing-backed electoral reform package earlier in June

Sales of jewellery, watches and clocks fell 14.9 percent by value compared with a 19.5 percent drop in April and a 18.6 percent decline in March. Earlier this month, the world’s biggest jewellery retailer Chow Tai Fook Jewellery saw its profit dropped 25 percent in the year ended in March 2015. It said it planned to close two stores in prime shopping districts in Hong Kong later this year.

Chow Tai Fook store Hong Kong