Retail sales, particularly of watches and jewelry, have been unsatisfactory in June and July, prompting shops to warn that there could be layoffs early next year if the situation does not improve, Sky Post reported on Thursday.
The Hong Kong Department Stores & Commercial Staff General Union said while the volume of sales has increased across the sector, the value of sales was far from satisfactory, indicating that shops are cutting prices to clear stocks.
Tang Cheung-sing, deputy secretary general of the union, blamed the retail sector’s lackluster performance on the continue drop in visitor arrivals from the mainland and elsewhere.
The stock market selloffs are also weighing on shoppers’ buying sentiment, he added.
Tang said many shops have opted to move to smaller retails spaces to keep costs low.
Prince Jewellery & Watch chairman Jimmy Tang Kui-ming said sales value from early June to June 25 grew 10 percent from a year earlier, but also dropped 10 percent from June 25 to the early part of July as stock markets tumbled.
He said he would consider it lucky if sales in the second half fell less than 10 percent from last year.
Lau Hak-bun, sales director at jeweler Chow Sang Sang Holdings International Ltd., said June was the worst-performing month so far this year, with the average sales amount dropping 10 percent from a year ago to HK$10,000 per transaction.
While there are no plans to lay off staff, Lau said his company has suspended hiring because of the hazy economic outlook.
Sales of watches and jewelry in the first week of July were 10 percent off expectations, the report said.
The Hong Kong Consumer Confidence Index in the second quarter has slightly risen to 85, with full marks being 200, according to a survey conducted by the City University of Hong Kong.
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