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

Mon Dec 1, 2014 4:50am EST
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By Anne Marie Roantree

HONG KONG (Reuters) - Hong Kong reported a slowdown in October retail sales on Monday, providing the first broad look at the impact of pro-democracy protests on core shopping areas in the Chinese-ruled city after demonstrators blocked key roads and scared off 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.

The impact on luxury categories was clear. Sales of jewelry, watches, clocks and valuable gifts slid 11.6 percent, while purchases of clothing dropped 8.8 percent.

Electrical and photographic equipment sales jumped 23.6 percent thanks to strong demand for smartphones, helping retail sales notch a 1.4 percent gain in October to HK$38.3 billion ($4.9 billion). That still represented a slowdown from 4.8 percent growth in September.

"After excluding the boost from the surge in sales of consumer durable goods due to the launch of new smartphone models, retail sales actually slackened to show a year-on-year decline in October," the Census and Statistics Department said in a statement.

"Looking ahead, the retail sales performance in the near term would continue to hinge on the impact of the protests on local and visitors' consumption sentiment," it added.

Three analysts contacted by Reuters had forecast falls of 0.3, 0.5 and 4.4 percent for October from a year earlier. Citi bucked the trend, 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.   Continued...

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