Hong Kong retail sales slump by 3.1pc in July as consumers scrimp on luxury

The summer holidays brought no relief for hard-pressed shopkeepers as retail sales declined for the sixth consecutive month - and retailers see no relief in sight until winter.

Total sales were down 3.1 per cent on July last year, government statistics released yesterday showed. It was a smaller drop than monthly year-on-year decreases from April to June, which ranged from 3.3 to 9.9 per cent.

The declines had sparked concerns that the city's retail industry was too geared towards mainland tourists; shops selling essentials had reported doing better than those offering the luxury goods visitors seek out.

A government spokesman noted that the decrease was smaller, and said the retail environment might look more stable as the effects of a spending boom last year on the comparisons eased. "However, the downside risks stemming from the recent slackening in tourist spending and external uncertainties warrant a close watch," he said.

Luxury sales continued to slump, while spending by locals remained flat.

Sales of jewellery, watches and valuable gifts were down 22.2 per cent on last year, compared to 28.2 per cent in June. Also down were sales in department stores, by 1.3 per cent, and sales of electrical goods and photographic equipment, by 10.4 per cent.

The decline came after robust growth from 2010 to 2013, during which sales of luxury goods and electrical products grew by a cumulative 164 per cent and 78 per cent, respectively, thanks to strong demand from tourists.