Hong Kong Retail Management Association: The retail environment in July remains weak; members expect an improvement in retail performance in August.

The President of the Hong Kong Retail Management Association, Xie Qiu Anyi, stated that the retail growth rate in June narrowed compared to May, mainly due to Hong Kong residents traveling abroad during the long holiday and adverse weather conditions. A member survey showed that the market remained weak in July, with about 30% of members expecting a decline in business, as residents travel abroad during the summer, impacting local consumption. It is expected that an increase in the number of visitors to Hong Kong from late July to August will help stimulate the retail market. In terms of categories, the sales of bread, cakes, candies, and cookies increased, likely driven by the World Cup; alcoholic beverages and tobacco saw slight increases mainly due to last year's high base effect. The survey covered 4,100 retail stores, involving approximately 80,000 employees, and the results showed that more than 30% of members expect an increase in business for July, nearly 30% expect it to remain flat, and over 30% anticipate a decline. Xie Qiu Anyi explained that the adverse weather in July significantly impacted retail sales, and the peak period for visitors to Hong Kong occurs in the latter half of July, which may not fully offset the impact of local residents traveling abroad during the summer. Department stores are expected to see a decline, while cosmetics, jewelry, electronics, and personal care are expected to report increases. Looking ahead to August, nearly 60% of respondents expect an increase in sales, nearly 30% expect it to remain flat, and over 10% expect a decline, reflecting a possibility of improved confidence in August. However, association members also noted that tourists are primarily focused on food and cultural experiences, and their purchasing power remains weak. Regarding the summer market, she believes that residents traveling abroad and adverse weather such as heavy rain have negatively impacted the market, and the uncertain global economy affects interest rate cuts and stock market performance, with negative factors still ongoing. Nonetheless, the increase in the number of tourists is helpful for the retail market. She anticipates that the market will stabilize in the second half of the year, with the market gradually absorbing external uncertainties. However, since retail sales have been increasing since September last year, the high base effect is expected to gradually narrow the retail growth rate in the second half of this year.