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2001 Christmas sales in Hong Kong's major overseas markets and retail outlook for 2002

The Hong Kong Trade Development Council monitors the Christmas sales situation in Hong Kong's major overseas markets as results reflect the following year's retail sales performance.

Reports from TDC branch offices indicated mixed results for 2001 Christmas sales. In the US, sales were below the good gains made at the start of the festive season, although retailers still managed to post a modest increase in business, facilitated by less out-of-town travelling.

In the EU, sales were strongest in the UK, amid rising wages and house prices. In the euro zone, where consumer confidence was generally weaker, sales were given a lift as shoppers opted to spend their national currencies instead of switching to the euro.

Elsewhere, the Christmas sales situation was much worse. Japanese consumers, in the face of job insecurity and falling incomes, did not have much appetite for year-end purchases. In the Chinese mainland, where the economy has been less affected by the fallout from the September 11th incident, consumer spending has remained relatively strong.

Given the increased focus on home and family not only in the US but also Europe, consumers have generally shifted from big-ticket items to basic and in-home products. As consumers chose to stay closer to home, home entertainment products like DVD players and wide-screen TVs were in demand. Even in Japan, sales of these items were robust.

Toys, especially product tie-ins related to Harry Potter and video games, were another bright spot. As for clothing, sales were affected by unseasonable warmth in the US, but chilly weather helped bring some welcome winter trade in both Europe and Japan.

As regards jewellery, sales in the US and Japan were dragged down by frugal spending on luxury items, while performance in the EU was better. Not unexpectedly, jewellery, as well as watches, sold particularly well in the UK.

Generally speaking, the retail sales outlook for overseas markets in 2002 is likely to follow the pattern of Christmas sales in 2001. In the US, the combination of monetary and fiscal stimuli should trigger a demand-led recovery by mid-2002. Expectations are for a slow but gradual expansion of retail sales, with value-for-money the catchphrase. In the meantime, recovery of the US economy will also stimulate European growth. A steady economic revival in the EU, on the whole, should bolster retail sales, although consumers will remain cautious. In the case of Japan, retail sales will remain weak, as economic troubles are expected to persist. Regarding the Chinese mainland, retail sales should further expand in view of persistent economic vigour and the country's accession to the WTO in December 2001.

For further reference, Hong Kong's Trade Outlook for 2002, another publication by the Council's Research Department, gives a more comprehensive analysis and more specific forecasts on Hong Kong's trade prospects. Trade Outlook, along with 2001 Christmas Sales in Major Overseas Markets and Retail Outlook for 2002, are available at the TDC Bookshop and its SME Service Stations. It can also be purchased through the CyberBookshop section in the TDC's trade portal: