Hong Kong grocers feel pain as locals rush to Shenzhen for cheaper prices; luxury and experiential retailers fare better
- Supermarket sales fell 9 per cent in January from a year ago, while other non-luxury spending slipped 2 per cent, S&P says
- Trends are likely to cap any rental gains in the retail property segment, where recovery will proceed in a gradual manner: analysts
Recovery in Hong Kong’s retail market is unevenly distributed, with luxury brands seeing improvement and neighbourhood shops facing challenges in the near term as residents continue to flock to Shenzhen to buy necessities at cheaper prices, according to analysts.
This trend is likely to cap any rental gains in the retail property segment, where recovery will proceed in a gradual manner, they said.
Retail sales in Hong Kong grew by nearly a fifth to HK$487 billion (US$62.2 billion) in 2023, according to data compiled by S&P in a report released last week. By the second half of 2023, sales had recovered to about 84 per cent of 2018 levels, the credit-rating agency added.
However in January, retail sales growth slowed to 0.9 per cent from 7.8 per cent in December despite 3.8 million tourist arrivals – nearly three quarters the level in January 2018.
