HK shoppers to regain prime spots as rents fall

facturers and vendors around the world. The decline in Hong Kong retail sales is inevitable and cannot be reversed by building attractions to lure tourists.

Closures of the outlets of some foreign luxury brands made headline news. There have been numerous reports of landlords cutting rents of prime commercial spaces to lure new tenants.

But their demise is having little economic or social consequence. The much-dreaded layoffs in the retail sector have not materialized. In fact, the booming catering sector is experiencing an acute shortage of labor, resulting in a surge in average wages for even unskilled menial jobs, such as dishwashing.

The people who get hit the hardest by the decline in tourism spending are landlords of commercial properties, vendors of foreign luxury goods and owners of the many pharmaceutical stores that sell herbal remedies and dried seafood mainly to mainland visitors. There is little reason for the government to even consider spending public funds for the benefit of those who are capable and willing to take commercial risks.

So far, lower rentals have not led to reduced prices of goods and services because business owners are reluctant to trim the high profit margins they have grown used to for so long catering to tourists. But in the longer-term, more and more Hong Kong consumers will reject the idea that getting fleeced is the price they have to pay for the privilege of shopping and entertaining in the hottest commercial strips in town.

Retailers and caterers will have to recognize that their fortunes will eventually be tied not to the ebb and flow of inbound tourism but to the steady support of local consumers. To win the loyalty of local patrons, retailers will have to accept the reality of lower profit margins and prepare to offer reliable services.

The retail boom driven by the surge in tourism spending is a thing of the past. Only a few who have benefited from it will miss it. The rest of us are looking forward to the return of normal times when we could get value for money at our favorite shops and restaurants wherever we choose to go.

The author is a veteran current affairs commentator.