According to the Census and Statistics Department (C&SD) of Hong Kong, the value of total retail sales in February 2011, provisionally estimated at $29.2 billion, increased by 8.6% over a year earlier. After netting out the effect of price changes over the same period, the volume of total retail sales increased by 5.1% in February 2011 when compared with a year earlier. The relevant components of the Consumer Price Index are used as deflators.
The revised estimate of the value of total retail sales in January 2011, at $37.6 billion, increased by 28.1% over January 2010, while the volume of total retail sales increased by 23.6%.
In interpreting these figures, it should be noted that retail sales tend to show greater volatility in the first two months of a year due to the timing of the Lunar New Year. The local consumer spending normally attains a seasonal high immediately before the Festival. As the Lunar New Year fell on February 3 this year but on February 14 last year, it is more appropriate to analyse the retail sales figures for January and February taken together in making year-on-year comparison.
Taking the first two months of 2011 together, total retail sales increased by 18.8% in value or 14.7% in volume over the same period a year earlier.
Analysed by broad type of retail outlet and comparing the combined total sales for January and February 2011 with the same period last year, the volume of sales of miscellaneous consumer durable goods increased the most, by 99.9%. This was followed by sales of jewellery, watches and clocks, and valuable gifts (+29.7% in volume); electrical goods and photographic equipment (+20.4%); footwear, allied products and other clothing accessories (+20.2%); wearing apparel (+14.3%); motor vehicles and parts (+13.0%); miscellaneous consumer goods (+12.7%); commodities in department stores (+7.8%); furniture and fixtures (+6.0%); commodities in supermarkets (+4.9%); and fuels (+2.4%).
Based on the seasonally adjusted series, the volume of total retail sales increased by 2.7% in the three months ending February 2011 when compared with the preceding three-month period.
These retail sales statistics are primarily intended to measure the sales receipts in respect of goods sold by local retail establishments, for gauging the short-term business performance of the local retail sector. They cover consumer spending on goods but not on services. Moreover, they include spending on goods by visitors in Hong Kong but not by Hong Kong residents outside Hong Kong. Hence they should not be regarded as a comprehensive indicator of overall consumer spending. In this context, it may be noted that the share of consumer spending on services in overall consumer spending has been increasing over time.
Users interested in the trend of overall consumer spending should refer to the data series of private consumption expenditure (PCE), which is a major component of the Gross Domestic Product. Compiled from a wide range of data sources, PCE covers consumer spending on both goods (including goods purchased from all channels) and services by Hong Kong residents whether domestically or abroad.
A government spokesman notes that retail sales are usually more volatile during the first two months of a year, due to the distortion caused by the timing of the Lunar New Year. Taking the first two months of 2011 as a whole, retail sales continued to display strength with a double-digit growth. The strong performance was supported by the sanguine consumer sentiment and vibrant inbound tourism.
The spokesman adds that going forward, improving job and income prospects should bode well for consumer confidence. This, coupled with the further growth of inbound tourism, should continue to support the retail business. Yet, there could be some impact on the business of certain retailers arising from the recent Japan incident. The impact on overall retail sales, if any, will be reflected in the figures in the coming months, and needs close monitoring.