Retailers cut prices to stay in business
Updated: 2009-07-22 08:04
By Joey Kwok(HK Edition)
|
|||||||||
HONG KONG: The deepening economic recession in Hong Kong continues to hurt the earnings of local retailers as consumers cut back on spending.
One local fish vendor, who identified herself as Mrs Lam, sells fresh fish at a Sheung Wan wet market. She said business in recent months has remained quite stagnant.
"We cannot mark our prices higher, even though the cost keeps soaring," Mrs Lam said. "Sometimes, we need to trim our prices or even mark it lower than the cost."
She added that it would be difficult to increase prices as local people remain cautious in their spending.
"The cost once dropped a bit after the global financial crisis," Mrs Lam said. "But we had to cut the price right afterwards, because of the intensive competition in the wet market."
"If the economy gets better, people will be more willing to buy," she added.
Local fast-food restaurant manager Mr Wu said revenue at his establishment has dropped almost 15 percent in the last two months.
"We have fewer customers coming to dine in the restaurant since May, although their spending has not changed much," Mr Wu said.
He said the restaurant has arranged quite a lot of promotions after the global financial crisis to boost customers' spending.
"We have just increased our menu prices slightly, to sustain the business revenue," he added.
The economic downturn has also affected the business of local wholesalers, as retailers are less willing to purchase amid the sluggish environment.
Local wholesaler David Wong, who imports goods from the mainland and sells to retailers in Hong Kong, said his business revenue in June has dropped by 30 to 40 percent.
"The appreciation of the Renminbi and the surge in labor cost on the mainland have increased the cost of goods by almost 20 percent," Wong said.
"Fewer retailers purchase the goods now, because of the decrease in end-user numbers," he said.
Like many consumers in Hong Kong, homemaker Helen Zhang is tightening her purse amid the economic downturn.
The 34-year-old said she would reduce her daily expenses in every possible way and try to cut spending on dispensable items, such as a new mobile phone or new clothes.
"When I go on holiday I choose to stay at a three-star hotel, whereas I used to look at four-star or above," Zhang said.
"Things in the supermarket are still priced the same or even higher," she added.
(HK Edition 07/22/2009 page4)