Date
18 December 2017
Retailers such as Sa Sa have seen their sales growth in Hong Kong slow due to reduced spending by mainland visitors. Photo: HKEJ
Retailers such as Sa Sa have seen their sales growth in Hong Kong slow due to reduced spending by mainland visitors. Photo: HKEJ

Retailers feel the squeeze as mainland visitors hold back

Sa Sa International Holdings (00178.HK), Stelux Holdings International (00084.HK) and Luk Fook Holdings International (00590.HK) have seen their sales falter due to weaker spending by mainland visitors and Beijing’s anti-graft efforts, the Hong Kong Economic Journal reported Friday.

Cosmetics retailer Sa Sa has seen the growth in combined sales in Hong Kong and Macau drop to 5.4 percent for the period from April to June 21, compared with an expansion pace of 28.1 percent in the same period last year, the report said, citing the company’s chairman Kwok Siu Ming.

Same-store sales are said to have expanded only 1.5 percent, a big contrast to the 18.6 percent rise during the year-earlier period. 

Kwok said he expects same-store sales to expand only at a single digit pace for the rest of the year.

Given the slowing retail sector, the Hong Kong government should think twice before deciding on any cut in the quota on individual mainland travelers, he said. If curbs are imposed on visitors, it could affect over one million jobs in the retail, hospitality and food and beverage sectors, he warned.

Jewelry retailer Luk Fook, meanwhile, is said to have suffered a 56 percent decline in same-store sales for the months of April and May, partly due to a larger comparison base last year during a gold rush.

The company is considering a shift in its business strategy to focus more on local consumers and reduce the reliance on mainland travelers. As part of the efforts, it may open more stores along local rail routes instead of the traditional tourist districts.

Eyewear and watch vendor Stelux is another company that has been affected by sluggish demand from mainland and Southeast Asian customers. The firm’s profit fell 41 percent in the financial year ended March.

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