Hong Kong Expects 1/4 of Retail Stores to Close by End-2020: Report

A man wearing protective mask walks past a closed shop covered with advertisements for rental space at Mongkok, following the outbreak of the COVID-19, in Hong Kong, China, on March 13, 2020. (Tyrone Siu/Reuters)

The Hong Kong Retail Management Association (HKRMA) said on April 16 that about 25 percent of retail stores in the Asian financial hub were expected to close by the end of the year despite fresh government relief measures against the fallout from the CCP virus pandemic.

Some 2,000 stores are seen closing in the February-April period, with 3,200 shops expected to shut down in May, according to a survey by HKRMA, conducted before the government announced the new relief measures for smaller firms.

Another 6,600 stores are expected to close in the May-August period, while 8,600 are likely to face closure between September and December.

A woman wearing a face mask, amid concerns of the COVID-19 coronavirus, shops at a fresh food market in Hong Kong, China, on April 5, 2020. (Dale De Le Rey/AFP via Getty Images)

Hong Kong last week announced relief measures worth HK$137.5 billion ($17.7 billion) to help businesses and people stay afloat as the city joins global efforts to cushion the impact of the pandemic.

The Hong Kong Tourism Board said on Wednesday the city’s visitor arrivals plunged 98.6 percent year-on-year in March.

HKRMA said about 17,200 stores were expected to close in 2020, accounting for one-quarter of the about 62,400 retail stores in Hong Kong, if there was no sign of improvement in the situation.

A masked man stands in front of an electronic board showing Hong Kong share index outside a local bank in Hong Kong, China, on April 15, 2020. (Kin Cheung/AP Photo)

“We will see that when you walk past every four stores, one will be closed, indicating that the retail sector is in a very rigorous stage of depression,” said HKRMA’s chairwoman, Annie Yau Tse.

“Manpower in not our biggest cost, our biggest cost is rent ...without appropriate rent reduction from landlords, it may waste the effort and the relief measures from the government,” she said.

Hong Kong’s retail sales fell by a record 44 percent in February from a year earlier, as travel restrictions kept tourists away and residents avoided shopping centers to prevent the spread of the CCP (Chinese Communist Party) virus.

Some 5,200 retail employees are expected to have lost their jobs in the February-April period, and another 5,200 jobs are set to go in May, making up of about 4 percent of the 260,000 workforce in the retail sector, HKRMA said.

Amy Tran (R) and her daughter Serene Ho (C) sit with their newly adopted dog Pepper (L) in a dog park at Kai Tak Runway Park in Hong Kong, China, on April 11, 2020. (Isaac Lawrence/AFP via Getty Images)

The association urged the city’s landlords to cut rent by 75 percent for at least 6 months or allow companies to pay a turnover rent, linked to sales, for at least 6 months.

Some 37 percent of the respondents to the survey expect they can keep operating for up to four months, with only 23 percent saying they can hang on for more than 12 months. Rent reductions have been secured by 72 percent of the respondents.

The impact of the novel CCP virus on Hong Kong’s tourism sector is unprecedented, and the city hopes to start seeing a return to normal by July, in part by trying to develop new markets, the head of the tourism board said.

HKRMA said earlier that it forecast retail sales value for first half of 2020 to fall 30 to 50 percent from the previous year, with more stores closure expected.

By Donny Kwok. Epoch Times staff contributed to this report.