Protests lead to slump in HK retail chain sales

HONG KONG — Sales at major Hong Kong retail chains plunged as much as 50 per cent during the bulk of the Chinese National Day holidays, after pro-democracy protests disrupted the shopping season, prompting industry practitioners to call for a quick solution before the former British colony posts its first decline in this month’s sales since 2003.

Sales dropped at least 15 per cent during the first five days of the holidays known as the Golden Week, the Hong Kong Retail Management Association said in a statement. Retailers selling watches and jewellery were among the most affected, said the group.

Sales at small- to medium-sized companies plunged as much as 80 percent, said the association. Those operating in the Mong Kok, Causeway Bay or Tsim Sha Tsui shopping areas occupied by protesters were hurt the most, it added.

The figures are among the earliest indicators of the financial toll caused by the protests that have roiled retailers since late last month.

Many Hong Kong businesses were already struggling before the latest demonstrations, a monthly survey by HSBC and Markit Group showed yesterday.

New business fell for the fifth straight month in September, while firms reduced staffing for the sixth consecutive month.

The protests have helped wipe close to US$50 billion (S$63.8 billion) off the value of shares on the Hong Kong stock exchange.

However, with investor confidence recovering in the wake of a meeting between protest leaders and government officials, Hong Kong shares finished higher for a third day yesterday.

The Hang Seng Index rose 0.5 per cent to 23,422.52 points — its highest close since Sept 26. The measure sank 2.6 per cent last week, the biggest such drop since March, after the police used tear gas and pepper spray in attempts to quell demonstrations.

The China Enterprises Index of the leading offshore Chinese listings in Hong Kong was 0.6 per cent higher. Agencies