Shops in districts affected by the pro-democracy protests have seen sales tumble 20 to 50 percent in the first five days of the National Day holiday (Oct. 1 to 5), compared with a year ago, the Hong Kong Economic Journal reported Tuesday, citing a survey conducted by the Hong Kong Retail Management Association (HKRMA).
Those most affected were watch and jewelry stores in Central, Admiralty, Causeway Bay and Mong Kok, where pro-democracy protesters have occupied major thoroughfares to press their demand for genuine universal suffrage in Hong Kong, the report said.
In addition to the Occupy protests, retail sales during the Golden Week were also affected by a slowdown in domestic spending within the mainland, HKRMA chairwoman Caroline Mak was quoted as saying.
As a result, October retail sales could see a negative growth, the first time since the mainland individual visitor scheme was launched in 2003.
Chain store operators said performance of shops at popular districts were not severely affected. According to industry sources, same-store sales growth (SSSG) must be maintained at 6 to 7 percent to offset the rise in costs.
Some 810,000 mainlanders visited Hong Kong in the five days since the Oct. 1 National Day, up 1.7 percent from a year ago.
Stelux Holdings Ltd., owner of Optical 88 eyewear stores, said the shopping habits of mainland visitors have changed in recent years, with an increasing number of tourists patronizing shops in the New Territories, including those in Tuen Mun, Shatin and Tai Po, according to the group’s chief financial officer Wallace Kwan.
Kowloon Watch Company managing director Wong Kam-shing said the group’s Mong Kok and Causeway Bay shops have seen sales drop by as much as 60 percent due to the Occupy protests.
Despite the protests’ relatively smaller impact on its shops in New Territories, sales of these shops still recorded a 20 percent decrease year on year, dragging the group’s overall sales down by 50 percent, Wong said.
According to a UBS analyst report, the Occupy campaign is going to have a limited impact on the local economy if protests are to cease within one to two months. In the worst case scenario, local retail income would drop by 11 percent, translating to a loss of HK$4 billion, or about 0.15 to 0.2 percent of the city’s gross domestic product.
World Bank economist Sudhir Shetty said the protests could slow down Hong Kong’s economic growth, but the impact on the Chinese economy would be almost immaterial.
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