It’s many happy returns of the festive season for Hong Kong retailers, but can the good times last?

After a depressing few years, the retail sector is ending the year on an upbeat note. But business owners should still prepare for challenges ahead.

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Retail sales are doing better on the back of more cheery consumer sentiment. But retailers should act to sustain the improving numbers. Photo: Sam Tsang

Published: 9:00am, 27 Dec 2017Updated: 2:40pm, 27 Dec 2017

With glittering lights, Christmas tree displays and discounts advertised on storefronts, Hong Kong’s malls were abuzz with tourists and local families this past weekend.

At the upmarket Pacific Place on Christmas Eve, diners indulged in hearty meals while shoppers tried on high street fashion and toted bags packed with purchases – a scene that must have made retailers wish themselves many happy returns of the season.

Indeed, they are generally feeling more cheery, given that the retail sector began awakening from a two-year slump after the first quarter of the year and is now on track to end 2017 in positive territory.

Tourists and local families thronged Hong Kong’s shopping malls over the festive period. Photo: Nora Tam

Retail sales grew by 3.9 per cent in October, and on average for the first 10 months of the year, sales edged up 1.2 per cent compared to the same period last year.

This slight uptick prompted the industry body, the Retail Management Association, to revise its full-year growth forecast upwards by one percentage point, to 3 per cent.

The wholesale and retail trades contribute only 4 per cent to Hong Kong’s gross domestic product, but they have always been closely watched for their impact on other parts of the economy.