Hong Kong counts cost of protests on city's core shopping districts

Sun Nov 30, 2014 4:09pm EST
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By Anne Marie Roantree

HONG KONG (Reuters) - Hong Kong is expected to report a drop in October retail sales on Monday, providing the first broad look at the impact of pro-democracy protests on core shopping areas after demonstrators blocked key roads and scared off mainland Chinese tourists.

Protests began choking parts of the Asia financial center in late September, disrupting business in one of the world's key markets for luxury companies such as Prada SpA, Burberry and Gucci owner Kering.

Three analysts contacted by Reuters forecast falls in retail sales of 0.3, 0.5 and 4.4 percent from a year earlier. Citi bucked the trend, with a research note predicting a rise of 1.2 percent.

There have been annual declines most months this year, including a 6.9 percent tumble in June, blamed largely on a corruption crackdown in China that hurt Hong Kong purchases of luxury goods. But September retail sales grew 4.8 percent.

"The impact of the (protest) movement to the retail sales data should be the most serious in the first two weeks of October as things were most intense back then," said Lily Lo of DBS Bank, who expects a fall of 0.3 percent.

China's "Golden Week" holiday, which ended Oct. 7, is usually one of the year's busiest shopping weeks, but scores of retailers said protests hit sales during the period, which began just days after police fired tear gas to disperse activists.


Sales persons wait for customers at a jewelry store at a road occupied by pro-democracy protesters at Mongkok shopping district in Hong Kong October 27, 2014. REUTERS/Bobby Yip