What: Recovery in Hong Kong is uneven, with new competition coming from China, and Japanese operators snapping up opportunities

Why it is important: While the grocery business is getting harder, luxury and experience-related businesses linked to shopping still fare well.

Hong Kong's retail recovery is uneven, with luxury brands seeing growth while neighborhood shops struggle due to residents shopping in Shenzhen for lower prices. This trend is expected to limit retail rental gains. Despite a nearly 20% increase in retail sales in Hong Kong in 2023, the growth in retail sales slowed in January 2024 due to cross-border shopping. Supermarket and non-luxury spending have declined, posing challenges for local retailers. However, luxury and experiential retailers are performing better, benefiting from tourist spending and novel shopping experiences .

HK grocers hurt by locals rushing to Shenzhen for cheaper price