Hong Kong posts worst retail figures since 2003

Hong Kong - Hong Kong posted its worst annual retail sales figures since the 2003 Sars outbreak, a media report said on Tuesday.

Spending declined 0.2% last year, while "slackening in visitor spending" on luxury products saw a decline of 3.9% in December, the government said on Monday, the South China Morning Post reported.

Sales of jewellery, watches and clocks, and other valuable items decreased by 13.7% in 2014 compared to 2013.

Total retail sales came to 493.3bn Hong Kong dollars ($63.6bn) last year, representing a decrease of 0.2% in value, the report said.

The decline was due to Beijing's crackdown on corruption, and a drop in non-Chinese tourists, Caroline Mak Sui-king, chairwoman of the Retail Management Association, said.

The number of mainland tourists rose by 16% last year, but that did not necessarily indicate increased spending power, she said.

Mak said pro-democracy protests had "not entirely" affected sales. She pointed to high rents and a labour shortage as additional challenges.

Ryan Lam, a senior economist with Hang Seng Bank, told the Post that retail sales would likely continue to fluctuate in the short term, but predicted improvement in the US and Hong Kong economies would drive local spending.

The government's outlook remains cautious. Near-term performance of retail sales would still hinge on labour market conditions and tourism growth, a spokesman said.

In February 2003, the city suffered an outbreak of the Severe Acute Respiratory Syndrome, or Sars. Many people chose to stay at home for fear of catching the virulent disease, hurting many retail businesses.