Hong Kong retail sales unexpectedly rebound as Covid curbs ease

HONG KONG’S retail sales surprisingly rebounded in April, lifting the sector out of contraction after strict Covid curbs hammered consumer spending earlier this year.

Sales value rose 11.7 per cent in April from a year earlier, the Census and Statistics Department said Wednesday. That was far better than the median estimate of a 7.9 per cent decline expected by economists in a Bloomberg survey.

It was also much better than the 13.8 per cent plunge in March, when Covid cases in the city ballooned and there were tight curbs on activity. 

Sales volume increased 8.1 per cent from a year ago, also much higher than the 10.8 per cent decline forecast by economists. 

April marked the start of the government’s efforts to lift restrictions on social interaction. Dining in-hours at restaurants were extended and gyms and beauty salons were allowed to reopen. The government also started handing out consumption vouchers, a programme which in the past has helped boost retail sales figures.

The government attributed the jump in retail sales to the “receding local epidemic and the disbursement of the first batch of consumption vouchers,” according to a statement.

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The retail data covers consumer spending on goods but not services such as catering, medical care and entertainment. Those services account for over 50 per cent of total consumer spending. 

Hong Kong has accelerated plans to ease curbs by reopening beaches and swimming pools.

This month, the city also began allowing non-residents to visit, although a mandatory hotel quarantine period of seven days still deters travel in and out of the city.

There are some signs that consumer activity continued to rebound in May.

Foot traffic at shops and restaurants over a recent period showed a reading that was the best since mid-January, according to Bloomberg Economics.

Retail visits climbed to within 16 per cent of pre-crisis levels in the first 22 days of the month, up from April’s 26 per cent shortfall and March’s 41 per cent, it said. BLOOMBERG