'Almost A Quarter Of Retailers Planning Job Cuts'

A new survey released on Monday suggests that almost a quarter of local retailers are planning layoffs in December after government subsidies expire at the end of the month – even though the government is painting a rosier picture.

The Hong Kong Retail Management Association surveyed members who employ 48,000 staff members at 2,400 outlets, and found that 23 percent are planning to lay off staff in December to cut costs.

Association chairwoman Annie Yau Tse says this coincides with the end of wage subsidies under the government’s Employment Subsidy Scheme (ESS).

"This is not a very good sign, because of the end of ESS, retailers are getting less help...not talking about the [lack of help from] landlords... we are not getting any help from anybody," she said.

She said local retailers aren’t optimistic about the prospects of a turnaround in the coming peak sales season.

But the government struck a more optimistic note as it unveiled new data showing that retail sales in Hong Kong declined for the 20th straight month.

The value of sales fell 12.9 percent year-on-year in September, easing slightly from a 13.1 percent reduction in August.

A government spokesman noted that the improvement is better than it may initially appear.

“Having considered that the base of comparison in the month was not as low as in August, the performance of the retail sector had actually shown some improvement over August as the third wave of the local epidemic abated," he said.

The spokesman added that while things will remain challenging for the sector in the near term, the government remains optimistic in the longer term.

“With the stabilisation of the local epidemic and the recent relaxation of social distancing measures, local consumption sentiment is likely to revive further", the spokesman said.

For September, sales of alcoholic drinks and tobacco saw a huge drop of more than 76 percent – compared to September 2019.

Sales of medicines and cosmetics plunged by 45 percent, but supermarket sales picked up 3.8 percent, with fresh fruits and vegetable up by 17 percent.

Altogether, the value of total retail sales in Hong Kong over the first nine months of 2020 dropped almost 29 percent from the same period a year earlier.