September Retail Sales Decline: What This Means for SMEs and the Economy

September Retail Sales Drop Significantly

September has witnessed a notable 6.9% decline in retail sales, marking the seventh consecutive month of downturn, as reported by the Census and Statistics Department. This drop can be attributed to the increasing trend of Hongkongers opting for shopping across the border in mainland China.

Impact on SMEs Amid Economic Changes

As many small and medium-sized enterprises (SMEs) struggle for survival, the repercussions of changing consumption patterns are evident. The figures show retail sales reached HK$29.6 billion in September, compared to a 10% year-on-year drop recorded in August. The continuous decline indicates a shift following a period of growth after the pandemic.

• Government Measures: Recent government initiatives aim to revive consumer sentiment, including stimulus measures to bolster the mainland economy.
• Policy Support: New tourist hotspots and relaxed visa applications are part of the strategy to enhance retail dynamics.
• SMEs are also set to benefit from the relaunch of the principal moratorium under the SME Financing Guarantee Scheme.

Future Outlook for Retail and SMEs

The government remains optimistic about improving market sentiment through forthcoming fiscal measures that target both the retail sector and SMEs. For instance, as part of the latest policy address, initiatives aimed at developing new consumer markets and expanding e-commerce frameworks highlight the proactive approach toward economic recovery.

Nonetheless, the current state of SMEs reflects a distressing scenario as many report cash flow issues, leading to a concerning trend of company closures. With over 64,594 businesses shuttering in just the first seven months of 2024, the call for immediate actions to support these entities becomes imperative.