Only supermarkets thriving in crisis, sector growing by 28%
A recent survey from the Statistics and Census Service (DSEC) shows that all but one of the retail business sectors have been recording significant drops. The exception is the supermarket business, which in June this year recorded year-on-year growth of 28.1%.
According to DSEC, the local coronavirus cases in mid-June 2022 had “notable impacts on the business performance of restaurants and similar establishments and retail trade.”
The bureau added that, for restaurants and other food and beverage (F&B) establishments, the average drop in June was 34.1% year-on-year.
Hit harder than average were Japanese and Korean restaurants (-42.1%) and Chinese restaurants, which dropped also over 40% (-40.1%).
Meanwhile, overall sales at retailers fell by 32.8% year-on-year in June with some sub-sectors dropping significantly more.
Motor vehicle retailers led the fall, registering -55.7% compared to one year ago, followed by department stores (-51.2%), adult clothing retailers (-44.8%) and watch, clock and jewelry retailers (-39.9%).
The only sub-sector to buck the trend was the supermarket business, which posted a 28.1% increase, a result reflecting their ability to stay open during the outbreak as well as the government consumption subsidy of 8,000 patacas previously provided to each resident.
Business expectations for the month of July were low, with respondents from both F&B and retail industries presenting a pessimistic outlook, taking into account the lingering impacts of the restrictions enforced as a result of the pandemic.
July expected to
be even worse
According to the DSEC survey, 97% of interviewed restaurants and similar establishments expect their receipts to decrease month-on-month in July, with all the interviewed Japanese and Korean restaurants and local style cafes, congee and noodle shops also anticipating a decline in receipts.
Concurrently, some 75% of interviewed retailers also forecasted a month-on-month sales drop for July, a percentage that is even higher if sub-sectors are considered. The gloomiest outlook was in the sub-sectors of department stores and watch, clock and jewelry retailers, in which 83% of those interviewed forecasted further drops. Motor vehicle retailers had a similar outlook, with 82% also expecting an even worse result for July.
In contrast, the supermarket sector saw a rosier picture, with 44% of those interviewed expecting sales increase further in July.
Forced closures
exacerbate bad results
Comparing results obtained in June with those from one month earlier (May), it is clear that results of the F&B industry dropped 28% in just one month but these results were not very different from the year-on-year fall, showing that the business performance of the sector was already very low and only aggravated by the forced closures of businesses. Some restaurants closed completely while others turned to take-away only as ordered by the government.
On the other hand, the impacts seen month-on-month in retail, taking into account their forced closure during the second half of the month, show that the businesses were already performing badly even before the outbreak, with month-on-month results 21.7% lower when compared to May.
The sample for the Business Climate Survey on Restaurants & Similar Establishments and Retail Trade comprises 229 restaurants and similar establishments and 161 retailers, which accounted respectively for 53.5% and 70.6% of the industry’s receipts in 2019.
