After encouraging figures in late 2017 and early last year indicated Hong Kong retailing had turned a corner for good, it might be back to square one this year.
Making any concrete statements about Hong Kong’s volatile retail sector is somewhat like making statements about its weather: you can look at the data and study the patterns, but things can change at a moment’s notice. But where weather is rooted in science, a great deal of retailing relies on sentiment, and the second half of last year appears to be grappling with sentiment that could potentially stall a sustained recovery.
Let’s rewind a few months. After the market appeared to bottom out in 2012, recovery seemed just around the corner. There was cautious optimism at the beginning of the year following six straight growth quarters, mainland visitor arrivals continued to trend up and retail-sales figures for the first six months of 2018 were strong — particularly in sportswear, cosmetics and everyday essentials.
Then came interest rate hikes, a correction in the equities market, a gradual drop in residential values and a trade spat between the US and China that evolved into an outright trade war by summertime.
