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Lam Ka-sing

Hong Kong’s retail sales dropped for the 12th straight month in February, falling by 13 per cent year on year, official figures released on Monday showed, while some analysts expected the weak sentiment to continue throughout the year.
Provisional estimates by the Census and Statistics Department put the total value of retail sales at HK$29.4 billion (US$3.8 billion) for the month.
“The year-on-year decline in the value of total retail sales in February 2025 widened, partly due to the earlier arrival of Lunar New Year in late January this year [when] compared with mid-February last year,” a government spokesman said.
Taking the first two months of the year together to remove this effect, the value of total retail sales saw a narrower decline on a year-on-year basis than in December 2024, he added.
The 13 per cent plunge in February is also much deeper than the 3.1 per cent year-on-year decline recorded in the revised estimate for January.
The Tourism Board earlier said that provisional visitor arrival numbers for January and February reached 8.4 million, up by 7 per cent year on year.
The board said it had combined figures for the first two months to provide a more accurate comparison as the Lunar New Year holiday ran from January 28 to February 4 this year, compared with February 10 to 17 in 2024.
Total retail sales in February were down by 36.9 per cent from the same month’s peak of HK$46.55 billion in 2015.

Gary Ng Cheuk-yan, a senior economist at Natixis Corporate and Investment Bank, said the retail sector was a small part of the economy but acted as a barometer for overall sentiment and had an important role in the labour market.
“The sector’s weakness is that it shows broad pressure, requiring more insightful policies to focus on the economy rather than other irrelevant areas to assist the transformation, especially given the financial deficit,” he said.
“Hong Kong’s retail sales [are still] likely [to] contract in 2025.”
Full-year retail sales in 2024 reached HK$376.85 billion, or 23.8 per cent below the peak of HK$494.45 billion in 2013. The 2024 figure was also 7.3 per cent below HK$406.65 billion in 2023.
Consumer durable goods have been the hardest hit.
Among all categories tracked by the department, motor vehicles and parts saw the biggest year-on-year dive in sales, down by 49.9 per cent, to HK$1.39 billion in the first two months of the year.
Furniture and fixtures followed with a 25.6 per cent decline in value to HK$755 million in the same period.
“Hong Kong retail sales [are likely to] see a narrowed decline in the coming months with the gradual return of tourists and lower interest rates,” Ng said.
“However, the structural change in the consumption pattern of mainland Chinese tourists, the fading confidence of the local middle class and the persisting trend of outbound tourism will continue to limit the recovery.”
Retail market sentiment was down by at least 20 per cent from the “golden era”, Ng said.
“Sentiment remains weak as shops compete with a smaller pool of revenue, which is just slightly better than the self-inflicted pressure from the Covid-19 policies,” he said.
Ng added that changes in consumption patterns continued to drive stable growth in basic food items, while the return of tourists should help with resilient demand for medicine and cosmetics.
“However, the rest of the retail sectors are still under structural transformation, and it is not easy to change overnight and compete with other cities,” he said.

Edwin Lee Kan-hing, the founder and chief executive of Bridgeway Prime Shop Fund Management, said sales in March “should stabilise” thanks to mega-events such as the Hong Kong Sevens and Art Basel.
He expected the catering industry, which overall performed similarly to before the pandemic, to fare better than retail in March.
Hong Kong Retail Management Association chairwoman Annie Tse Yau On-yee, meanwhile, said retailers’ “biggest worry is Hongkongers’ outbound travel during the long Easter holiday” and the lack of a long holiday on the mainland over the same period.
“Mega-events are expected to mainly drive business in their districts, instead of benefiting Hong Kong in general,” she said. “Strong promotion and discounts are necessary to keep sales flat or trigger a rise by single digits.”
An association survey in March, covering about 3,000 shops, including department stores, retailers selling electronics, food, non-casual wear, furniture, household goods and watches, found they had experienced declining sales and had a more pessimistic outlook.
She added that the industry would discuss quality checks for goods and ways to reduce costs with the government, noting items sold on online platforms were subject to fewer regulations than traditional retailers, so they incurred lower costs and could offer cheaper prices.
Property agency Midland IC&I said rent levels for shops in residential areas were expected to stabilise this year.
But those in core areas, such as Mong Kok, Tsim Sha Tsui, Central and Causeway Bay, were anticipated to slide further by 5 to 10 per cent, it said.
The agency added that the expected number of shop transactions was expected to benefit from the multiple-entry individual visit scheme, which currently covers 59 mainland cities, helping to increase the figure by 20 per cent to 1,150.


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The 13 per cent plunge in February is much deeper than the 3.1 per cent year-on-year decline in the revised estimate for January. Photo: Dickson Lee

The Tourism Board has said provisional visitor arrival numbers for January and February reached 8.4 million, up by 7 per cent year on year. Photo: Jelly Tse

Tourists shop at Canton Road in Tsim Sha Tsui. Photo: Jelly Tse

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Hong Kong’s economy is undergoing “structural adjustments”, the finance chief says. Photo: Edmond So

Hong Kong’s lacklustre property market has affected the government’s income. Photo: Eugene Lee

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Mainland Chinese tourists visit Victoria Harbour. Photo: Sam Tsang

Tourists visit The Peak. Photo: Edmond So

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Hong Kong Economy

Some analysts expect weak sentiment to continue throughout 2025 amid changing consumption patterns among mainland tourists, other factors


Some analysts expect weak sentiment to continue throughout 2025 amid changing consumption patterns among mainland tourists, other factors.


Retailing

Hong Kong society