Hong Kong retailers set for riot losses

Monday, 06 October 2014
The Hong Kong pro democracy riots may cost retailers nearly 300 million dollars of sales losses. The disruptions come during China's Golden week holiday, where many of its mainland residents visit Hong Kong for a shopping weekend. The ANZ bank has estimated that retailers could lose 6 percent of the month's total retail sales, estimated at 282 million dollars.

China suspended travel permits for shoppers

China last week suspended travel permits for domestic tour groups looking to visit Hong Kong because of the protests. The China National Tourism Administration told travel agencies on Monday to stop organising Hong Kong-bound tours until further notice.

Hong Kong retailers located near the protest sites such as Causeway Bay and Mongkok have had to close stores because of the unrest while protesters have also moved into Admiralty and Canton Road areas.

"Sales of luxury goods, cosmetic products, and consumer durables are definitely hard hit," Raymond Yeung, senior economist at ANZ wrote in a report.

As the Golden Week may be responsible for half of the month's total sales, market anecdotes suggest that store sales have declined by about 70 percent, the affected shops might have lost 2.2 billion Hong Kong dollars.

If the protests continue to drag on, Hong Kong's Q4 outlook will increasingly turn gloomy, noted ANZ Bank.

The US, UK, Canada, France, Italy, Germany and Australia have also issued travel warnings to their citizens travelling to Hong Kong, telling them to avoid the protest areas.

Image: Hong Kong riots

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