Hong Kong (7/10). Months of protests have hit nearly every aspect of the Hong Kong economy, weighing on tourism, consumer spending, stocks and economic growth. The latest indicator to take a hit: retail sales.
Hong Kong protests leave shopping retailers already fearing a Christmas downturn. Shopping malls are stalling on campaign plans, including huge decorative displays like years before. Escalating violence makes everybody worried.
Radical activists escalated their actions in response to the anti-law mask. Shopping malls have been caught up in the chaos especially in a three-day holiday weekend (Oct 4, 5, 6). Most shopping centers, supermarkets, grocery stores, retail outlets and restaurants shut for the days for fear of more protest violence and vandalism.
The Sogo department store, Fashion Walk and World Trade Centre in Causeway Bay were closed. Body Shop – next door to the Causeway Bay station which was set fire by the protesters – closed its store all week. Some shops and convenience stores in the area which were still open for business, closed early as a precaution.
Other malls in Kowloon and New Territories, such as Amoy Plaza in Kowloon Bay, the IFC mall in Central and Citylink Plaza in Sha Tin, were also closed.
Shopping centers have been regularly vandalized during the long-running unrest, with radicals turning on shops with links to mainland China.
New Town Plaza in Sha Tin, Elements in West Kowloon, V City in Tuen Mun and V Walk in Sham Shui Po are popular locations for protests. The Sogo department store in Causeway Bay, one of the biggest in Hong Kong, also has been at the center of several protests in recent months, prompting it to close its doors at times.
Department-store sales dropped 30% from a year ago. Many businesses and stores have had to close repeatedly during the four months of protests and Hong Kong now faces its first recession in a decade.
Value of retail sales fell 23% in August from a year ago, the worst monthly decline on record, according to the Hong Kong Census and Statistics Department. Luxury items have been the biggest victims, according to the data released Wednesday. Sales of items such as jewelry, watches, clocks and other valuable gifts dropped 47% from a year ago, a record decline.
Before the uncertain coming Christmas, many shopping malls and stores closed on China’s National Day (Oct 1), the day when people usually go crazy shopping with so many discounted prices.
A marketing director of a key property developer, which runs at least 20 malls in Hong Kong, confirmed there were delays to Christmas advertising and marketing campaigns.
“We can only wait and see for now on when to push and how big the scale of the campaigns will be,” the director said.
As the protests are evolving constantly it is hard for the malls to make big campaign about the festive weeks. That also make the advertising agencies feel anxious.
“I am worried about Christmas because shopping centres will normally brief advertisers in August so that marketing campaigns can be rolled out in November,” said Rudi Leung Chi-sing, founder of advertising agency Hungry Digital.
Now it’s already October and they haven’t got the orders yet.
Meanwhile, some online companies, such as Food Panda and HKTV Mall, performed well partly because people are avoid going out for dining and shopping for groceries.
But the bigger brands, especially luxury brands will be hit harder because Hong Kong shoppers tend not to shop online for a Louis Vuitton handbag.
Several countries have travel advisories in place for Hong Kong. Once a very popular tourist destination, now Hong Kong is facing the lack of travelers visiting places of attraction and spending money in this shopping heaven.
Drop in tourism amid anti-government unrest has seen airlines slash fairs. Hong Kong Tourism Board spokeswoman said it hoped such low fares would encourage more people to visit Hong Kong.
These days Hong Kong has violent incidents in various districts. The extreme acts of the rioters and the level of vandalism is escalated and unprecedented. It makes everyone worried and in fear. Christmas is not coming.