Testing times ahead for stores in Hong Kong

Retail sales in Hong Kong fell 4.1 percent year-on-year in May. The retail sector's performance was "mainly dragged down by the notable fall" in the sales of luxury goods, which are hot among mainland tourists. Bobby Yip / Reuters

Lower spending by visitors from mainland puts brakes on sector

Hong Kong's retail sales fell 4.1 percent year-on-year in May to HK$39 billion ($5 billion), the fourth consecutive month of decline.

Market insiders cited shifting shopping habits of mainland tourists as a reason for the decline.

Sales volume slid 4.7 percent year-on-year, the city's Census and Statistics Department said on Thursday.

The latest decline underlines the deterioration of the retail sector in Hong Kong, a government spokesman said.

The retail sector's performance was "mainly dragged down by the notable fall" in the sales of luxury goods, which are hot among mainland tourists.

That trend "conceivably indicates lower tourist spending on major big-ticket items against a still high base of comparison in May last year", said the spokesman.

Among all sectors, the sales value of luxury items, such as jewels, watches and other valuable gifts, witnessed the steepest annual decline of 24.5 percent in May.

That was followed by sales of electrical goods and photographic equipment, also popular among mainland tourists, which slid 14.3 percent.

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