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The Census and Statistics Department (C&SD) released the latest figures on retail sales today (March 31).
The value of total retail sales in February 2016, provisionally estimated at $37.0 billion, decreased by 20.6% compared with the same month in 2015. The revised estimate of the value of total retail sales in January 2016 decreased by 6.6% compared with a year earlier. For the first two months of 2016 taken together, the value of total retail sales decreased by 13.6% compared with the same period in 2015.
After netting out the effect of price changes over the same period, the volume of total retail sales in February 2016 decreased by 19.5% compared with a year earlier. The revised estimate of the volume of total retail sales in January 2016 decreased by 5.2% compared with a year earlier. For the first two months of 2016 taken together, total retail sales decreased by 12.3% in volume compared with the same period in 2015.
In interpreting these figures, it should be noted that retail sales tend to show greater volatility in the first two months of a year due to the timing of the Lunar New Year. Consumer spending in the local market normally attains a seasonal high before the festival. As the Lunar New Year fell on February 8 this year but on February 19 last year, it is more appropriate to analyse the retail sales figures for January and February taken together in making year-on-year comparison.
Analysed by broad type of retail outlet in descending order of value of sales and comparing the combined total sales for January and February 2016 with the same period last year, the value of sales of jewellery, watches and clocks, and valuable gifts decreased by 24.2%. This was followed by sales of wearing apparel (-11.4% in value); commodities in department stores (-12.3%); medicines and cosmetics (-7.7%); food, alcoholic drinks and tobacco (-2.0%); other consumer goods, not elsewhere classified (-4.2%); electrical goods and photographic equipment (-26.7%); miscellaneous consumer durable goods (-31.9%); motor vehicles and parts (-21.2%); footwear, allied products and other clothing accessories (-7.4%); books, newspapers, stationery and gifts (-8.9%); furniture and fixtures (-6.5%); Chinese drugs and herbs (-7.8%); and optical shops (-8.3%).
On the other hand, the value of sales of commodities in supermarkets increased slightly by 0.2% in the first two months of 2016 over the same period a year earlier. The value of sales of fuels remained virtually unchanged.
Based on the seasonally adjusted series, the value of total retail sales decreased by 8.3% in the three months ending February 2016 compared with the preceding three-month period, while the volume of total retail sales decreased by 9.0%.
These retail sales statistics measure the sales receipts in respect of goods sold by local retail establishments and are primarily intended for gauging the short-term business performance of the local retail sector. They cover consumer spending on goods but not on services (such as those on housing, catering, medical care and health services, transport and communication, financial services, education and entertainment) which account for some 50% of the overall consumer spending. Moreover, they include spending on goods in Hong Kong by visitors but exclude spending outside Hong Kong by Hong Kong residents. Hence they should not be regarded as indicators for measuring overall consumer spending.
Users interested in the trend of overall consumer spending should refer to the data series of private consumption expenditure (PCE), which is a major component of the Gross Domestic Product published at quarterly intervals. Compiled from a wide range of data sources, PCE covers consumer spending on both goods (including goods purchased from all channels) and services by Hong Kong residents whether locally or abroad. Please refer to the C&SD publication "Gross Domestic Product (Quarterly)" for more details.
Commentary
A government spokesman indicated that the performance of retail sales slackened further on entering 2016. Taking the first two months of 2016 together to remove the distortions caused by the difference in timing of the Lunar New Year holidays, retail sales recorded a double-digit decline over a year earlier. Apart from the severe drag from the protracted slowdown in inbound tourism, the asset market consolidation might also have weighed on local consumption sentiment.
The near-term outlook for retail sales will still be constrained by the weak inbound tourism performance and uncertain economic prospects. The Government will continue to monitor closely the retail sales performance and its repercussions on the wider economy and job market.
Further information
Table 1 presents the revised figures on value index and value of retail sales for all retail outlets and by broad type of retail outlet for January 2016 as well as the provisional figures for February 2016. The provisional figures on the value of retail sales for all retail outlets and by broad type of retail outlet as well as the corresponding year-on-year changes for the first two months of 2016 taken together are also shown.
Table 2 presents the revised figures on volume index of retail sales for all retail outlets and by broad type of retail outlet for January 2016 as well as the provisional figures for February 2016. The provisional figures on year-on-year changes for the first two months of 2016 taken together are also shown.
Table 3 shows the movements of the value and volume of total retail sales in terms of the year-on-year rate of change for a month compared with the same month in the preceding year based on the original series, and in terms of the rate of change for a three-month period compared with the preceding three-month period based on the seasonally adjusted series.
The classification of retail establishments follows the Hong Kong Standard Industrial Classification (HSIC) Version 2.0, which is used in various economic surveys for classifying economic units into different industry classes.
More detailed statistics are given in the Report on Monthly Survey of Retail Sales. Users can download this publication free of charge at the website of C&SD (www.censtatd.gov.hk/hkstat/sub/sp320.jsp?productCode=B1080003).
Users who have enquiries about the survey results may contact the Distribution Services Statistics Section of C&SD (Tel: 3903 7400; email: mrs@censtatd.gov.hk).
Ends/Thursday, March 31, 2016
Issued at HKT 16:33
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