Retail sales in Hong Kong increased by 15.7 per cent in the first two months

The Census and Statistics Department (C&SD) released the latest figures on retail sales yesterday on 3^rd April 2018.

The value of total retail sales in February 2018, provisionally estimated at $45.2 billion, increased by 29.8 per cent over the same month in 2017. The revised estimate of the value of total retail sales in January 2018 increased by 4.2 per cent over a year earlier. For the first two months of 2018 taken together, it was provisionally estimated that the value of total retail sales increased by 15.7 per cent over the same period in 2017.

After netting out the effect of price changes over the same period, the provisional estimate of the volume of total retail sales in February 2018 increased by 28.2 per cent over a year earlier. The revised estimate of the volume of total retail sales in January 2018 increased by 2.3 per cent over a year earlier. For the first two months of 2018 taken together, the provisional estimate of the total retail sales increased by 13.9 per cent in volume over the same period in 2017.

In interpreting these figures, it should be noted that retail sales tend to show greater volatility in the first two months of a year due to the timing of the Lunar New Year. Consumer spending in the local market normally attains a seasonal high before the Festival. As the Lunar New Year fell on February 16 this year but on January 28 last year, it is more appropriate to analyse the retail sales figures for January and February taken together in making year-on-year comparison.

Analysed by broad type of retail outlet in descending order of the provisional estimate of the value of sales and comparing the combined total sales for January and February 2018 with the same period a year earlier, the value of sales of jewellery, watches and clocks, and valuable gifts increased by 21.0 per cent. This was followed by sales of wearing apparel (+19.5 per cent in value); medicines and cosmetics (+17.4 per cent); electrical goods and other consumer durable goods, not elsewhere classified (+27.9 per cent); commodities in supermarkets (+1.0 per cent); food, alcoholic drinks and tobacco (+10.5 per cent); commodities in department stores (+10.9 per cent); other consumer goods, not elsewhere classified (+22.3 per cent); motor vehicles and parts (+19.9 per cent); footwear, allied products and other clothing accessories (+18.2 per cent); fuels (+4.5 per cent); furniture and fixtures (+9.3 per cent); Chinese drugs and herbs (+7.6 per cent); and optical shops (+2.1 per cent).

On the other hand, the value of sales of books, newspapers, stationery and gifts decreased by 1.3 per cent in the first two months of 2018 compared with the same period a year earlier.

Based on the seasonally adjusted series, the provisional estimate of the value of total retail sales increased by 4.9 per cent in the three months ending February 2018 over the preceding three-month period, while the provisional estimate of the volume of total retail sales increased by 3.7 per cent.

A government spokesman indicated that retail sales strengthened visibly in the first two months of 2018, showing double-digit growth in value terms over a year earlier, thanks to favourable job and income conditions and a further pick-up in visitor arrivals. Given the difference in timing of the Lunar New Year holidays between last year and this year, analysing figures for the first two months combined would help to remove the distortions and show the underlying trend.

Looking ahead, the outlook for retail sales should remain positive in the near term, underpinned by upbeat local consumer sentiment amid a full employment situation and by continued improvement in inbound tourism. Nevertheless, various external uncertainties persist and still warrant attention. The Government will monitor closely the situation.