As economic growth slowed down and social conflicts continued, retail sales in Hongkong expanded further in July, and have fallen for another 6 months.

The latest figures released by the Hongkong SAR Government in August 30th showed that retail sales in July were temporarily estimated at HK $34 billion 400 million, down 11.4% from a year ago, the biggest decline in nearly 3 and a half years. After deducting price changes, total retail sales in July dropped by 13% compared with the same period last year.

Compared with the same period last year, Hongkong's total retail sales fell by 3.8% in the first 7 months of this year, and the total sales volume also dropped by 4.4%.

A spokesman for the Hongkong Special Administrative Region government said that retail sales in July were further worse, reflecting weak local consumer sentiment and recent social events which had a major impact on tourism and consumption activities in Hong Kong. The warming of Sino US trade frictions and poor economic conditions will continue to affect consumer sentiment, and retail sales will remain weak in the short term.

A spokesman for the HKSAR government said that if the social incidents involving violence could not be subsided, the retail industry would deteriorate further.

According to the main categories, the value of jewelry, watches and clocks and precious gifts decreased by 24.4% annually, followed by 13% of clothing, 16.1% of drugs and cosmetics, 10.4% of department stores, 2.3% of food, alcoholic drinks and tobacco.

Other unclassified consumer goods fell by 1.4%, electrical appliances and other non durable consumer goods fell by 17.4%, auto and auto parts dropped 5.8%, fuel fell 0.1%, footwear, related products and other clothing accessories fell 10.1%, newspapers, stationery and gifts fell 6%, furniture and fixtures fell 8.7%, Chinese medicine fell 5.8%, and optical shops fell 17.8%. The value of goods sold in supermarkets increased by 1% on an annual basis.

The Hongkong Retail Management Association said in August 22nd that members of the association reflected the sharp decline in business from June, with sales falling to two digits. Most retailers have dropped more than half of their sales since the beginning of August. If the situation continues to deteriorate, many retailers are expected to lay off or even close their jobs.

Take garment retailer Giordano (0709) as an example, net profit fell 6.6% to HK $161 million in the first half of this year. Liu Guoquan, chairman and chief executive of the company, pointed out that Giordano has 75 branches in Hong Kong and Macao. The company will freeze the number of employees and salaries and discuss the rent with the owners.