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Free AccessMNI REALITY CHECK: Sharp Recovery Seen For China Holiday Sales
China's retail sales for the first two months of the year look set for a sharp rebound on the year ago period when the initial Covid-19 outbreak disrupted the consumer market, analysts told MNI, adding that the rising consumer confidence with the epidemic under control and the holiday season were also drivers.
Retail sales in January and February – China measures the first two months as a single for comparison due to the Lunar Chinese New Year holiday -- is expected to rise 33.0% y/y, said Wang Jingwen, a senior researcher at the Pangoal Institution.
This compares to the 20.5% decline a year ago, although Wang expects the figure may be about 5% higher compared to a more normal 2019.
GOOD SALES
Key retail and catering companies nationwide achieved sales of about CNY821 billion during the week-long New Year holiday (Feb. 11-17), a rise of 28.7% over last year's comparable period, an increase of 4.9% from that of 2019, according to the Ministry of Commerce.
Department stores in first- and second-tier cities enjoyed a better holiday season than those in smaller cities, with migrant workers encouraged to stay in work locations, said Yang Qingsong, secretary general of China Commerce Association for General Merchandise (CCAGM).
The average daily passenger flow of shopping malls in 10 first- and second-tier cities across the country increased by more than 200% y/y over the holiday, reaching 86% of the comparable 2019 level, the ministry said.
In a sample survey carried out by the CCAGM, 15 major retail companies reported an average sales growth of 265% y/y during the holiday, or 66% when compared to same period 2019. "Cosmetic products, jewelry and smart home appliances were among the most popular goods," said Yang, "while restaurants and beverage stores in shopping malls were booming with long lines."
High-end department stores enjoyed higher traffic and sales than usual as restricted outbound tourism saw Chinese tourists' spending at home, Yang added.
RESTAURANTS
Restaurant business in Shenzhen city also benefitted from the stay close to home calls, said Qiu Zhencheng, vice president of Shenzhen Catering Service Trade Association.
Talking about a restaurant he manages, revenues in February grew about 40% over 2019. Although dining crowds over 50 people are still restricted, in-store traffic has basically recovered to 100% of the pre-pandemic level, said Qiu.
Qiu noted that many brands which previously shut some stores to cut losses now have expansion plans, as most restaurants may have already recovered losses. "The epidemic has reshuffled the industry, and those who survived have the financial muscle," Qiu added, remaining optimistic towards the catering business in coming months as the epidemic is controlled.
CAR SALES
According to China Passenger Cars Association, retail sales of cars hit 3.34 million in the first two months, rising by a historic 69.6% y/y due to last year's low base when the figure slipped 41.0% y/y.
While sales flat when compared to that of 2019, and it was weaker than the performance in the second half of 2020. This was mainly due to the downturn in county and township car markets, as fewer workers returned to their ancestral homes for holiday this year, according to the CPCA.
Though travel services including train and plane ticket sales were affected by less Spring Festival travel rush, it is not counted into the retail sales figure, said Wang.
The median of analysts' expectation of combined January and February retail sales polled by Bloomberg was +32.0%.
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Why MNI
MNI is the leading provider
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