Hong Kong's retail sales fell for the 17th straight month in July, hurt by fewer big-spending tourists, persistently weak consumer sentiment and a strong local dollar. China's slowdown has depressed business activity in Hong Kong, well known as one of Asia's shopping paradises, and the city has posted more than a year of declining tourist arrivals as mainland visitors sought out other Asian destinations, including Japan and South Korea, which offered cheaper travel options.
Retail sales in July slid 7.7 percent from a year earlier to HK$34.6 billion ($4.46 billion) in value terms, easing from an 8.9 percent decline in June. In volume terms, July sales dropped 8.5 percent, government data showed on Monday.
"The performance in July was mainly dragged by the fall in visitor spending on some big-ticket items, and also reflected the more cautious local consumer sentiment amid an uncertain economic outlook," the Hong Kong government said in a statement. "Looking ahead, the near-term outlook for retail sales will continue to depend on the performance of inbound tourism and on whether the various external uncertainties would affect local consumer sentiment."
Hong Kong received around 200 tours a day during the first half of the year, about half of what it received in the same period a year ago, said David Luk, vice chairman of Hong Kong Inbound Travel Association. Luk, however, said he expects an improvement in the second half as the economy stabilizes.
The Hong Kong Tourism Board has not yet released tourism figures for July.
Uncertainty due to Britain's vote to leave the European Union is expected to weaken the British pound and other European currencies, making Hong Kong an even more expensive destination.
The city is struggling with mounting economic challenges at a time when its currency is strong. The Hong Kong dollar's peg to the greenback means it is prone to strengthen when other Asian currencies weaken.
Sales of jewelry, watches, clocks and valuable gifts in July fell 26.2 percent in value terms, the 23rd consecutive month of decline. Department store sales slid 6.9 percent on the year.
Italian luxury goods maker Prada SpA said on Friday its first-half net profit fell 24.7 percent as Chinese consumers developed a taste for cheaper brands amid slowing economic growth and a Beijing clampdown on lavish spending by officials.
Lifestyle International Holdings, which operates the well-known Sogo department store in the city, posted a 49.9 percent drop in first-half profit amid weak consumer sentiment in China and Hong Kong.