Retails of wearing apparel soar in March

April 29, 2008 - Hong Kong

The Census and Statistics Department (C&SD) released the latest figures on retail sales April 29.

The value of total retail sales in March 2008, provisionally estimated at $22.6 billion, increased by 20.0% over a year earlier. After netting out the effect of price changes over the same period, the volume of total retail sales increased by 13.0% in March 2008 over a year earlier.

The revised estimate of the value of total retail sales in February 2008, at $22.8 billion, increased by 9.5% over February 2007, while the volume of total retail sales increased by 4.4%. This came after an increase of 23.2% in value or 17.6% in volume in January.

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, against the background that the local consumer spending normally attains a seasonal high immediately before the Festival. For the first two months of 2008 combined, retail sales increased by 16.4% in value or 11.0% in volume from a year earlier.

Taking the first quarter of 2008 together, total retail sales increased by 17.5% in value or 11.6% in volume over the same period a year earlier.

Analysed by type of retail outlet and comparing March 2008 with March 2007. The sales of wearing apparel (+19.0%); furniture and fixtures (+16.9%); miscellaneous consumer goods (+15.7%); footwear, allied products and other clothing accessories (+13.2%); commodities in department stores (+11.5%); jewellery, watches and clocks, and valuable gifts (+10.7%); commodities in supermarkets (+4.9%) and miscellaneous consumer durable goods (+4.7%).

Based on the seasonally adjusted series, the volume of total retail sales increased by 0.7% in the first quarter of 2008 compared with the preceding quarter.

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 quarterly 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.

Commentary:
A Government spokesman pointed out that retail sales expanded rapidly in March over a year earlier, indicative of the sustained upbeat consumer sentiment.

Looking forward, the firm labour market conditions, rising income, and further growth of inbound tourism, will continue to provide support to the retail trade. Nevertheless, there is a need to stay alert to the impact of the unfolding global financial turbulence and the US economic slowdown on the economy and consumer sentiment.