Hong Kong is facing a veritable retail apocalypse, according to a new survey by the Hong Kong Retail Management Association.
The survey – which polled 176 retailers who together run more than 4,300 stores and account for somewhere between a fifth and a third of the sector’s jobs – found that “at least” 5,600 positions will be rendered “redundant” within the next six months.
The poll was conducted from October 29 through November 22, a period that included a grievous third quarter GDP print underscoring the depth of the economic malaise and some of the worst violence yet.
30% of respondents expect to eliminate 10% of headcount (on average, anyway) over the next six months. 11% plan to close businesses and nearly half warned their survival is in jeopardy past the six-month window.
“This is the worst on record”, Association chairwoman Annie Tse Yau On-yee said. “We don’t know when it will get to the bottom as it is uncertain when peace will be restored to society”.
The business outlook for the city darkened further in November, pushing the PMI for the whole economy to 38.5. That horrific print comes alongside an equally harrowing slump in exports. As for the retail sector itself, well, data out last week showed retail sales shrank 26.2% by volume in October and 24.3% by value. Those are both record contractions.
“Even if it stabilizes, it will be a long road before Hong Kong rebuilds its international reputation and tourists return to the city”, the above-mentioned Tse lamented.
In the survey, 40% of respondents said they will be able to survive because landlords have halved rents. 97% of the companies said they are losing money.
Hong Kong last week unveiled a new stimulus package in a bid to bolster the flagging economy in the face of the protests. Over the weekend, a largely peaceful demonstration drew the largest turnout in months.
Read more: Horrific Data, Spiraling Violence Force Multi-Billion Dollar Stimulus Efforts In Besieged Locales
