- About 30 per cent of the 176 companies which responded to survey said they would lay off 10 per cent of their staff in the coming six months
- Hong Kong Retail Management Association, which carried out the survey, says doom and gloom in industry will cause a chain reaction for economy
Hong Kong's struggling retail sector will suffer at least 5,600 job redundancies and 7,000 firms will fold in the coming six months " the worst figures on record " as the ongoing political and social turmoil deals a heavy blow to the economy.
Those were the findings of a survey released on Monday on 176 retailers, which run 4,310 stores and employ 33 per cent of the sector's workforce, by industry body the Hong Kong Retail Management Association. The survey was carried out between October 29 and November 22.
Association chairwoman Annie Tse Yau On-yee said the doom and gloom in the industry would cause a chain reaction that would worsen the city's economy, which was already in recession.
"This is the worst on record," Tse said. "We don't know when it will get to the bottom as it is uncertain when peace will be restored to society. Even if it stabilises, it will be a long road before Hong Kong rebuilds its international reputation and tourists return to the city."
Hong Kong has been battered by protests, sparked by the now-withdrawn extradition bill, since June. The protests have evolved into a wider anti-government campaign, which has descended into violence and chaos, including disruptions to train services and destruction of shops, restaurants and banks with mainland China connections.
Tourist arrivals, a key driver of consumption, tumbled 43.7 per cent in October, the sharpest fall since May 2003, when the city experienced an outbreak of the deadly Severe acute respiratory syndrome (Sars).
Tse said apparel, shoes, health and beauty and jewellery retailers were hit hard.
In October, retail sales shrank 24.3 per cent year on year, the worst since government records started in January 1981.
About 30 per cent of the 176 companies which responded to the survey said they would lay off 10 per cent of staff in the coming six months.
Tse said the respondents in question employed 21 per cent of the industry's 270,000 work force, which meant more than 5,600 people would lose jobs. Those polled included companies running chain stores and individual small and medium sized enterprises (SMEs).
"This means more than 5,600 families will be affected," she said. "When these families have lower or no income, their spending power will be hurt and their mortgage repayments will be affected, too."
Some 97 per cent of the companies were losing money. About 11 per cent of those polled said they would fold their businesses in the coming six months. Tse said based on the 64,000 business registrations of retail firms in Hong Kong, this means at least 7,000 companies would be snared.
She said a minority of retailers managed to obtain rent cuts from landlords.
"Most them are still dragging their feet on lowering rents and those who offer lower rents, the help is too little to make any difference," she said.
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Tse urged the government to "think out of the box" in speeding up procedures in approving its latest wave of relief measures, worth HK$4 billion and announced last week.
Retired tycoon Li Ka-shing's charity said on Monday it had completed distributing HK$1 billion to more than 28,000 SMEs in affected industries such as retail, tourism and food and beverage, less than a month after it revealed its offer.
Tse said the industry's priority was to cut costs even though some pro-business lawmakers had floated the idea of the government boosting consumption by issuing consumer coupons worth HK$10,000 to each Hong Kong resident.
"The key is having peace return to the city," she said.
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