Hong Kong retail sales grow 16.2% in 2023, bouncing back from contraction

For 2023 as a whole, the value of total retail sales was provisionally estimated at HK$406.7 billion, an increase of 16.2 per cent over the previous year.

“Looking ahead, visitor arrivals should increase further alongside the continued recovery of handling capacity,” a government spokesman said.

“Rising household income also bodes well for local consumption. These factors, coupled with the government’s efforts to promote mega events and launch various activities including ‘Day x Night Vibes @ 18 Districts’, should provide support to retail businesses.”

Retail sales last month surged by 50.1 per cent over December 2022 for jewellery, watches and clocks, and valuable gifts, followed by other consumer goods, apparel, commodities in department stores, and medicines and cosmetics.

Taking into account seasonal factors, retail sales decreased by 3.3 per cent in the fourth quarter compared with the previous three months, the department said.

Hong Kong tourism numbers forecast to return to pre-Covid level by end-2025

Senior economist Gary Ng Cheuk-yan, from Natixis Corporate and Investment Bank, said the city’s retail sector was still struggling to find its way out of structural challenges.

“Outbound tourism will only grow more, and it is hard to expect tourism spending to recover at the same pace. As the cyclical momentum is exhausted, Hong Kong retail sales growth may decelerate from 16 per cent in 2023 to 2 per cent in 2024,” Ng said.

Hong Kong welcomed 33.9 million visitors last year, about 55 per cent of the average across 2017 and 2018.

The city’s economy rebounded last year, with its gross domestic product increasing by 3.2 per cent over 2022. For the whole of 2023, private consumption surged 7.4 per cent year on year.

Hong Kong’s post-pandemic recovery has been gradual due to weak global demand, escalating geopolitical tensions and the sluggish mainland China economy.

The city’s exports plunged 7.8 per cent last year compared with 2022, even after a rebound in growth in the fourth quarter following a prolonged contraction.

Meanwhile, retail sales in Hong Kong registered three periods of contraction within the last five years.

In 2021, the city logged growth of 8.1 per cent in retail sales, marking a significant improvement compared to the contractions of 24.3 per cent in 2020 and 11.1 per cent in 2019.