Footwear & clothing accessories retail sales soar in June

The Census and Statistics Department (C&SD) released the latest figures on retail sales July 31.The value of total retail sales in June 2008, provisionally estimated at $22.2 billion, increased by 11.6% over a year earlier. After netting out the effect of price changes over the same period, the volume of total retail sales increased by 4.0% in June 2008 over a year earlier.The revised estimate of the value of total retail sales in May 2008, at $23.2 billion, increased by 13.0% over May 2007, while the volume of total retail sales increased by 5.6%. Taking the first half of 2008 together, total retail sales increased by 15.9% in value or 9.3% in volume over the same period a year earlier.Analysed by type of retail outlet and comparing June 2008 with June 2007, the volume of sales of fuels increased the most, by 18.1%. This was followed by sales of footwear, allied products and other clothing accessories (+10.0%); wearing apparel (+9.1%); furniture and fixtures (+6.6%); miscellaneous consumer durable goods (+5.9%); miscellaneous consumer goods (+5.3%); commodities in department stores (+3.1%); and jewelry, watches and clocks, and valuable gifts (+1.4%). On the other hand, the volume of sales of motor vehicles and parts and that of commodities in supermarkets decreased by 10.5% and 1.3% respectively in June 2008 compared with a year earlier, while the volume of sales of food, alcoholic drinks and tobacco remained almost unchanged.Based on the seasonally adjusted series, the volume of total retail sales decreased by 1.7% in the second quarter of 2008 compared with the preceding quarter.These retail sales statistics are primarily intended to measure the sales receipts in respect of goods sold by local retail establishments, for gauging the short-term business performance of the local retail sector. They cover consumer spending on goods but not on services. Moreover, they include spending on goods by visitors in Hong Kong but not by Hong Kong residents outside Hong Kong. Hence they should not be regarded as a comprehensive indicator of overall consumer spending. In this context, it may be noted that the share of consumer spending on services in overall consumer spending has been increasing over time.Users interested in the trend of overall consumer spending should refer to the quarterly series of private consumption expenditure (PCE), which is a major component of the Gross Domestic Product. Compiled from a wide range of data sources, PCE covers consumer spending on both goods (including goods purchased from all channels) and services by Hong Kong residents whether domestically or abroad.Commentary:A Government spokesman said that retail sales expanded at a more moderate pace recently, after a rather long period of exceptionally strong performance.Looking forward, the slowing global economic growth, strains in the financial markets, elevated inflationary pressure and international commodity prices, and consolidation in local asset prices are all likely to put a drag on the local economy and hence influence consumer sentiments. Yet, the firm labour market conditions, together with further expansion of inbound tourism, should continue to provide support to the retail trade.

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