Hong Kong’s retail sector maintained its recent momentum in July, with sales climbing 1.8% year on year, signalling a stabilisation in the industry, the government announced on Monday.

Data from the Census and Statistics Department showed this was the third straight month of growth after 14 months of decline.

Retail sales reached HK$29.7 billion (US$3.8 billion), representing a sharper gain than June’s revised 0.7% increase, South China Morning Post reports.

According to a government spokesperson: “Local consumption sentiment should remain steady”.

“The government’s proactive efforts in promoting tourism and mega-events will also benefit retail businesses,” he said.

However, retail sales for the first seven months of the year still posted a 2.6% decline compared with the same period in 2024.

Online shopping remained a bright spot, making up 8.7% of total retail sales in July. Provisional figures showed online sales reaching HK$2.6 billion, a 13.2% increase from a year earlier.

In June, online retail sales recorded a revised year-on-year rise of 13.1%. For the first seven months of 2025, provisional estimates indicated a 2.1% increase compared with the same period in 2024.

Yet, despite shifts in the retail landscape and repeated appeals from businesses for rent cuts, Hong Kong shops continue to rank among the most expensive in the world.

Indeed, a shop in Mong Kok recently fetched rent of HK$1,333 per square foot, “definitely the highest in Asia currently, and top three in the world, too,” according to Rickey Chan Chi-po, managing director of local property agency Dorbo Realty.

Even so, rental prices remain under pressure and could fall by another 2 to 5% as Hongkongers keep spending across the border and residential areas see less benefit than prime tourist districts, Lee noted.

That said, he added, ongoing tourism, major events like the National Games, and the upcoming Christmas season should lift sentiment, bringing a more optimistic outlook for the second half of the year.

Furthermore, Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, struck a cautious tone despite July’s improvement from last year’s low, pointing to ongoing challenges and looming uncertainties for the retail sector.

“For mainland visitors, although their numbers are up, their spending power is still in a very sluggish state. The increase in business does not match the increase in foot traffic,” she said.