Now that 2009 is all behind us but if we look back, I am sure no single sector would regard it was an easy year in any way. The first 9 months were particularly tough due to the financial tsunami. Its destructive power was more devastating than the Asian Financial Crisis in 1997 considering the global nature this time. The financial troubles originated in the U.S. caused a domino effect dragging other sectors, such as airline, hotels and retailing, across boundaries.

The H1N1 epidemic in the first half of the year was another challenge. Businesses were unavoidably affected due to the worrying atmosphere. At the peak of the swine flu outbreak, the suspected visitors entering China had to be quarantined for a week for observation. This, as a result, discouraged both outbound and inbound travel activities, and encumbered retail consumption.

The tipping point came sometime in September and October, when we hear the first good news after a long time of negative retail sales performance. The monthly retail sales in October saw an increase by 9.8% in value and 8.2% in volume compared to the same period in 2008. The rebound was attributed to the pick-up in tourism which rose by 9% in October on a year-on-year basis, among which the Mainland visitors even increased by 22.8% due to the Mid Autumn Festival and National Day Golden Week holidays which is one day longer when compared to last year.

While we can now gasp for a breath amid the gradual economic recovery, we still remain cautious because the recent retail sales growth merely brought us back to the retail sales level in 2007 and that was quite largely helped by Mainland tourist spending which also means not all retail sectors were benefited. Our lost grounds have not been resumed as the total retail sales were still negatively recorded at -2.2% and -3.1% in value and in volume respectively, from January to October versus the same period in 2008.

Hong Kong is indeed a blessed city with many unique opportunities. In the past decades, we had tourists from different destinations flocking to Hong Kong. We had Japanese tourists in the 80s then followed by Taiwanese in the 90s. Now over 50% of our tourists are from the Mainland China who love shopping in Hong Kong. The Association is glad to have joined the Hong Kong Tourism Board recently to welcome the visit of the first batch of the non-Guangdong residents from Shenzhen under the Individual Visit Scheme. While we appreciate the great opportunities brought by all these new policies, it is equally important for us to continue to grow our internal consumption as a balance to any future changes.

To increase domestic demand, the retail market should welcome diverse brands from a mix of retailers to protect Hong Kong’s renowned reputation as the world’s shopping paradise for consumers from all walks of life. However, one key factor that has limited the varieties of retail outlets is the high rental in Hong Kong. A number of smaller retailers are unfortunately squeezed out of the market since they simply cannot afford the continuously escalating rents. Innovation is necessary and good for business. However, some landlords have been unreasonably pushing retailers to create extra décor and provide unique offers specifically in their malls. This results in high rising costs which will eventually lead to inflation.

Amidst economy recovery, we are glad to see an improvement of unemployment rate down to 5.2% in the third quarter. The Association will continue its efforts aligning with the Government’s initiatives in promoting employment and development of human capital. In this regard, the Association has been orchestrating the set-up of Qualifications Framework (QF) of retail trade since early 2009. It is to much of our delight that an industry forum organized by the QF Secretariat will take place on 19 January, 2010. Another positive news is that the Labour Department will establish a recruitment centre for the retail industry by the mid of 2010.

On a similar move to support retail practitioners, we are excited to announce that the Professional Diploma Programme in Retail Management, a joint effort between the Association and the Chinese University of Hong Kong – Tung Wah Group of Hospitals Community College is now open for application. This is the first major step in developing retail talents in Hong Kong through a structured collaboration between the Association and a tertiary education institute. It is important that the trade should take advantage and support this initiative.

A number of lobbying activities are ongoing and will continue into the new year. The Association has just met with the Provisional Minimum Wage Commission to reflect the trade’s views collected from the Association’s minimum wage survey findings. On the proposed Producer Responsibility Scheme on Waste Electrical and Electronic Equipment (WEEE), we lobby through a press conference on the WEEE Alliance’s Japan study tour and several meetings with the Environmental Protection Department and different stakeholders. On the Nutrition Labelling (NL) Scheme to be effective in the mid of 2010, we met with Dr. York Chow, Secretary for Food and Health, to share the trade’s concerns as well as suggestions on ways to smooth out the implementation. The Association also assists concerned members to get access to various NL-related meetings organized by the Centre of Food Safety for obtaining useful information.

To round up the year, I would like to sincerely thank our members for your generous support. Our various programmes and events have been well received by members. At our 2009 Annual Ball, we were excited by the overwhelming response in terms of a record turnout together with the very enthusiastic participation of the members at the singing performance － Medley from Retail Talents (“零售星聲Sing”) for the first time. In 2010, our reputable Service & Courtesy Award is going to mark its Silver Jubilee and we hope all of you will join us to witness this milestone!

The Year of Tiger may be full of challenges. May we all be courageous and energetic like a tiger and take bold steps towards our goals. On behalf of the Association, I wish you all a happy new year!

Caroline Mak
Chairman
January 2010