29 Dec 2005
TDC: reports show satisfactory growth of Christmas sales
Sales results in the Chinese mainland were encouraging, but Germany and Italy fared less well.
Consumer electronics, particularly digital music players, were especially popular in these markets. Video games were another hot seller, while clothing did well due to the cold weather.
Christmas sales in Hong Kong's major overseas markets are regarded as an effective indicator for forecasting Hong Kong exports growth in the year ahead.
TDC's Assistant Chief Economist Daniel Poon said Hong Kong's exports in 2006 should still be robust, although growth will likely be at a slower pace.
"Consumption in the US will slow a bit, and spending in the EU will remain moderate. Consumption in Japan will rise modestly. Yet solid growth should take hold on the mainland," said Mr Poon.
Sales started off strongly after Thanksgiving, but then slowed down as holiday shoppers adopted a wait-and-see approach to buying. However, US retailers were helped by a last-minute shopping spree and managed to record a moderate sales increase of around 3.5%.
- Despite rising interest rates and high energy cost, fundamentals for consumer
spending were propped up by the robust employment landscape and higher disposable
- A slightly longer Thanksgiving-to-Christmas period of 30 days, compared
with 29 days last year, was another positive factor.
- A Saturday Christmas Eve, a late Hanukkah, the lack of must-have items
(with the major exceptions of video games and digital music players), as well
as the three-day transit strike in New York, also played a part in holding
off shopping until the very last moment this Christmas.
- To attract procrastinating shoppers, retailers offered new merchandise and deep discounts, and extended their business hours more aggressively than last year.
- Handheld digital audio players, flat-panel TVs, DVD players, digital cameras,
mobile phones and notebook computers topped US consumers' shopping lists.
- Video game systems, as well as other electronic toys such as robotic pets,
radio-controlled cars, children's cell phones, MP3 players and video cameras,
all sold well.
- Warm clothes and related accessories received a timely boost from the recent
cold weather, especially in the Northeast and Midwest.
- Jewellery and watch sales were helped by the sustained demand for up-scale merchandise.
On the whole, European consumers seemed to be more cautious during this festive season, with disappointing Christmas sales in Germany and Italy. However, year-end sales were better in the UK and France.
- Concern over job prospects, still-high oil prices and lukewarm consumer
confidence held back European spending.
- Also exerting an impact on consumer sentiment across Europe were the rejection
of the EU constitution treaty in France and the Netherlands in the middle
of the year, the German general election in September and the riots in France
- Most EU retailers relied heavily on discounts and promotions to lure Christmas shoppers.
- In Germany, Christmas was not encouraging for retailers, with holiday sales
roughly matching last year's - the worst showing since 1996. Evidently, high
joblessness remained the main deterrent to consumption, as the export-led
growth of the German economy has yet to feed through into the domestic sector.
- In France, where domestic demand has been stronger, year-end sales were
revved up by a last-minute flurry, despite the recent riots.
- Sliding confidence in Italy discouraged consumers from spending during
this holiday season.
- In the UK, Christmas sales were above earlier expectations, with festive
spending expected to have increased by around 2.5%. Despite higher unemployment,
weaker housing prices, and the spectre of terrorist attacks in the wake of
the July bombings in London, consumer spending was stoked by the rekindled
popularity of electronic gadgets and demand for warm clothing in the cold
- With the rising popularity of high-speed Internet connections, EU's e-tailers enjoyed remarkable sales. In the UK, on-line sales surged by some 50% from last Christmas.
In line with the continued resurgence of the Japanese economy, year-end sales in Japan rose modestly.
- Increased winter bonuses and better job prospects encouraged consumers
to spend more money during Christmas, with higher-income customers showing
a penchant for luxury items.
- The victory of the ruling LDP party in the parliamentary elections last September further lifted business and consumer confidence.
Consumer electronics were a big hit. In particular, flat-panel TVs, DVD players/recorders and portable digital audio players were key drivers of sales.
On the Chinese mainland, where consumption has remained favourable, year-end sales were on the rise as a result of the growing popularity of the Christmas holiday. Most consumer products, including consumer electronics, toys, garments, watches and jewellery, were among favoured gift items.
A full Christmas Sales report can be downloaded from
TDC's 2006 Hong Kong Trade Outlook can also be downloaded from:
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