Hong Kong Retail are struggling as a wave of store closures sweeps through the city — from long-standing restaurants to cinemas, bakeries, and food courts.
What’s Changing?
- Locals are spending less at home and choosing to shop and dine across the border in Shenzhen, where prices are lower.
- Mainland Chinese tourists, once the lifeblood of Hong Kong retail, are spending less despite tourist numbers rebounding close to 2018 levels.
- A 41-year-old bakery, a 30-year-old congee chain, and even high-end food courts have closed in recent weeks — highlighting the scale of the problem.
Numbers Paint a Bleak Picture
- Retail sales rose 2.4% YoY in May to HK$31.3 billion, the first rise in 14 months.
- But that’s still only 77% of May 2018’s figure (HK$40.5 billion).
- Prime street rents have dropped to 2003 levels.
- Cafe de Coral reported a 29.6% drop in net profit citing weak sentiment.
Insights from Experts
“The change in consumption patterns is irreversible.”
— Annie Yau Tse, Chairwoman, Retail Management Association
“It’s a structural shift in the local retail market… beyond repair even by further reducing rents.”
— Jack Tong, Director, Savills Research & Consultancy
Broader Pressures at Play
- China’s economic slowdown
- Rising geopolitical tensions
- Post-COVID consumer conservatism
- Lingering impact of Hong Kong’s 2019 protests and national security crackdown
Silver Linings?
- Jewellery expos are seeing more footfall from Chinese buyers, even if they’re only browsing for now.
- Tourism campaigns with Coldplay concerts and Man Utd events are driving traffic.
- May saw 4.08 million visitors, nearing the 4.95 million in 2018.
In short: The Hong Kong retail sector is going through a deep transformation. Consumer habits have changed, cross-border competition is fierce, and legacy business models are under threat. Recovery is possible — but it may require redefining value, experience, and strategy for a new generation of shoppers.
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