Call to cut rent for Hong Kong shops by third amid sluggish sales

Industry leader Annie Tse calls for a 30 per cent reduction in rents, saying downward trend will continue to year end or even early 2025

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A shopper browses clothes in Yau Tong. Photo: Jonathan Wong

Published: 3:36pm, 2 Sep 2024Updated: 7:45pm, 2 Sep 2024

The outlook for Hong Kong’s retail sector remains bleak through to early next year, an industry representative has warned while calling for rental reductions of at least 30 per cent.

Hong Kong Retail Management Association chairwoman Annie Tse Yau On-yee shared the projection on Monday after figures showed the retail sales volume shrank by 11.8 per cent year on year to HK$29.1 billion (US$3.7 billion) in July, marking a contraction for the fifth consecutive month.

The five-months of decline followed 15 months of continuous growth after the Covid-19 pandemic, with authorities attributing the slowdown to changes in consumption patterns, the strong Hong Kong dollar and a rise in outbound summer travel.

“The trend will continue to the end of the year or even early next year. The situation may improve slightly next March or April because the base figure in 2024 is low enough,” she told a radio programme.

Tse said the recent increase in the number of inbound travellers had little impact on alleviating retail woes as the anticipated boost amid the Labour Day “golden week” holiday and the summer season was minimal.

“Consumption patterns have changed. Previously, retail sales were mainly driven by mainland tourists, but now most of them come here for sightseeing and don’t spend much,” she said.

“A 30 per cent rent reduction is necessary to truly help the industry … Some of our members got a 5 to 10 per cent cut, which is better than nothing but does not reflect the market realities.”