HONG KONG retailers looking for a fortuitous start to the Chinese New Year should expect to be disappointed as a weaker yuan, stock market volatility and a drop in same-day visitors from the mainland put further pressure on a sector already suffering after months of sliding sales.

    Reports from the retail and catering sectors suggest same-day visitors to Hong Kong so far this year are “a bit weaker” than last year, according to Anthony Lau, executive director of the Hong Kong Tourism Board.

    The group said last week that the number of monthly visitors in December was down 11 percent year on year, and the number of tourists from the mainland fell 16 percent over the same time frame. The total number of annual visitors to Hong Kong fell 2.5 percent last year to 59.3 million.

    The lunar celebration, which starts Sunday, is a peak season for tourism in Hong Kong, bringing in more than 5 million monthly visitors compared with about 4.5 million in an average month. Day trips account for more than half those visits as people traditionally shop for gifts in the weeks before the holiday.

    Lau said that while it’s “a bit too optimistic” at this time to say the total number of visitors will rise in 2016, he will be “pretty satisfied” if the number of overnight travelers remains flat.

    Hong Kong retail sales have been falling on an annualized basis every month from March 2015 through December, according to data compiled by Bloomberg Intelligence. Government statistics released Tuesday showed the city’s retail sales totaled HK$47.5 billion in 2015, down 3.7 percent from a year ago. The drop was the largest since 2002.

    The Hong Kong dollar strengthened 0.8 percent against the yuan in January and is up 5.6 percent over six months through to Feb. 1, making it more expensive for mainlanders to shop in the city. Over the same time frame, more than HK$3 trillion was wiped off the market capitalization of the city’s benchmark Hang Seng index.

    Young Sun Kwon, Hong Kong economist at Nomura, said retailers may offer steeper discounts to overcome the strengthening Hong Kong dollar and broader slowdown in spending.

    “They know that the situation is not good,” Kwon said in a phone interview. “They are willing to sacrifice their margins to maintain or increase their volume.”

    High-end watch and jewelry sellers are suffering the most as shoppers from the mainland eschew lavish purchases, and prices become cheaper in other Asian cities as regional currencies slide against the Hong Kong dollar, according to HSBC retail analyst Erwan Rambourg.

    Chow Tai Fook, the world’s largest listed jewelry chain, said last month that sales during Chinese New Year would be challenging. Emperor Watch blamed a preliminary 2015 loss on decline in foot traffic caused by the strong Hong Kong dollar, high rental pressure in Hong Kong and austerity initiatives on the mainland.

    Rambourg expects more retail stores to close in the wake of the challenges in Hong Kong.

    (SD-Agencies)