Sales of jewelry and other luxury items in Hong Kong slid in October, even as an upturn in the health situation eased the market slowdown.

Revenue from jewelry, watches, clocks and other valuable gifts fell 27% year on year to HKD 2.88 billion ($370.9 million) for the month. While the drop was significant, it was less sharp than the declines seen in the past few months, Hong Kong's Census and Statistics Department reported Tuesday. Sales in all retail categories slipped 9% to HKD 27.42 billion ($3.54 billion).

"The year-on-year decline in retail sales narrowed in October as consumption sentiment improved amid the stable epidemic situation in that month," a government spokesperson said. The improvement was also due to a lower base of comparison during the same period the previous year, the spokesperson noted.

The retail environment has remained challenging this year amid a difficult job market due to Covid-19 and given the two-week quarantine the Hong Kong government imposed on tourists arriving from mainland China — an important source of luxury sales. Despite the recent recovery, retail is likely to decline again in the coming months.

"Looking ahead, with the fourth wave of the local epidemic spreading widely and quickly, the business environment of the retail trade may deteriorate again in the near term," the spokesperson added.

Revenue from jewelry, watches, clocks and other valuable gifts slumped 57% to HKD 24.61 billion ($3.17 billion) for the first 10 months of the year. Sales in all retail categories declined 27% to HKD 266.37 billion ($34.36 billion) for the January-to-October period.

Courtesy: Rapaport