Retail sales of jewelry and other luxury items fell sharply in Hong Kong in June amid increasingly cautious consumer sentiment and a slowdown in tourism.
Revenue from jewelry, watches, clocks and other valuable gifts dropped 17% year on year to HKD 5.75 billion ($734.4 million), the municipality’s Census and Statistics Department reported last week. Sales in all retail categories slipped 7% to HKD 35.21 billion ($4.5 billion).
Tourists from mainland China are major consumers of luxury goods in Hong Kong. Continued economic uncertainty due to fears about tariffs on trade between the US and China has caused tourism to decline, affecting sales, advisory firm PricewaterhouseCoopers said last month. In addition, demonstrations against an extradition bill have also dented luxury sales. The government expects the decline to continue if the protests in the municipality persist.
“Retail sales registered an enlarged decline in June, as local consumer sentiment turned more cautious and growth in visitor arrivals moderated,” a government spokesperson noted. “The near-term performance of retail sales will likely remain subdued, as the weakened global and local economic outlook and other headwinds continue to weigh on consumption sentiment. The recent mass demonstrations, if continued, would also dent the retail business further.”
Retail sales of jewelry, watches, clocks and other valuable gifts decreased 7% to HKD 40.62 billion ($5.19 billion) in the first half of the year. Sales in all retail categories for the January-to-June period fell 2.6% to HKD 241.27 billion ($30.81 billion).
In June, the number of tourists visiting Hong Kong rose 9% to 5.1 million, the Hong Kong Tourism Board reported, compared to 14% growth for the first half of the year combined.