Hong Kong retailers still closing stores over lack of tourists 

Find out which big brand names had to shut their doors permanently.

The absence of tourism continued to have serious repercussions for Hong Kong’s retail market. Knight Frank says total retail sales value in May dropped by 1.7% YoY to HK$29.1 billion. For the first five months of 2022, total retail sales value decreased by 2.9% year on year.

Despite the government’s launch of electronic consumption vouchers to boost retail sales, retailers that rely heavily on inbound tourists are still facing a huge challenge. 

Here’s more from Knight Frank:

Burberry decided to close its three-storey flagship on Canton Road, the prime shopping street in Tsim Sha Tsui. The closure of the Tsim Sha Tsui store came after Burberry shut its renowned Russell Street flagship store last year, which reflected the unabated pressure faced by the luxury retailers in the throes of the pandemic. Valentino, Tiffany & Co and Coach all closed down their stores one after another on Canton Road as tourists evaporated. 

While shop rentals in prime locations dropped drastically, some prime spaces in Russel Street, in Causeway Bay, have become more affordable to local retailers. According to market sources, Shop 26 on Russell Street was leased to Titan, a local houseware retailer, for a reported monthly rent of HK$200,000, which marked a significant drop of 87% from the peak rent of HK$1.52 million per month. 

In the near term, the outlook for Hong Kong’s retail market remains highly difficult, so retail rents are expected to face further pressure. Uncertainty in the economy, interest rate hikes and delays in the border reopening could weigh on consumption sentiment. On the bright side, however, the second phase of the HK$5,000 consumption vouchers to be disbursed in August could provide a tailwind, underpinning much-needed retail sales and restaurant receipts for the time being.