At a time of so much mayhem and misery in the world, we must seek solace in heart-warming stories that offer mankind a few glimmers of joy and hope. And what better boost to our spirits than the sight of the Hong Kong ‘retail sector’ collapsing to its knees, clutching its throat, gurgling and howling and haemorrhaging blood?
A quick word on definitions: the ‘retail sector’ is not to be confused with what most of us call ‘shops’, which are local businesses selling affordable, useful things to local people. For a decade, Hong Kong residents have been suffering inconvenience and cost as their traditional ‘shops’ have been displaced by overpriced luxury-garbage outlets catering to floods of gullible or money-laundering Mainland visitors. Thanks to economic trends and Beijing’s anti-corruption drive, the ‘high-end’ Mainland-shopper deluge has finally peaked – but not before smothering whole neighbourhoods with multiple gold, cosmetics, watch and medicine stores. We must now endure the self-pitying whining of tourism/landlord ‘retail’ interests as they realize they have overextended themselves like bloated greedy pigs at a buffet who have stuffed their fat, sweaty faces with ketchup-laden oysters. (Chow Tai Fook’s store locator returns an incredible 90 branches in Hong Kong alone.)
Over the last year, the ‘retail sector’ has warned of terrible calamities as their sales have slowed and even retreated. Lacking the honesty and manliness to blame Chinese leader Xi Jinping for unhelpful policies – or themselves for their own short-sighted gluttony – they ranted at Hong Kong’s pro-democracy protestors and community-defending localists. In an attempt to rally public opinion against the opposition, our deluded government actually urged us to believe that the Umbrella kids had vandalized our precious ‘retail sector’, then acted all surprised and hurt when grateful voters rewarded the aforementioned kids accordingly at the recent District elections.
The whole Mainland-tourist/retail thing is essentially about hiking rents to benefit the usual landed interests. Having bid rentals up in their lust for outlets, the luxury-crap merchants are now wetting themselves about the curse of… high rents. Apparently expecting sympathy from the public, they instead get chortles, mockery and best wishes for a speedy demise. This highly amusing and hope-inspiring trend shows no sign of ending soon.
Today’s retail massacre bloodbath doom story is Burger King, whose small Hong Kong network seems to be mostly shutting down in a ‘retail exodus’, or as a wordier headline would put it, ‘you might get some of your old shops back’.
There is probably a business-school case-study here, concerning the pointlessness of trying to win market share from McDonalds by offering a slightly classier and pricier variety of disgusting greasy slop aimed at children, maids and the indigent. But the chain seems also to be suffering the side-effects of the last few years’ spiraling rents, and we are informed that shops selling watches, handbags, medicine and beef jerky are dying similar horrible deaths. It’s not often that a mention of ‘Burger King, medicine and beef jerky’ makes your mouth water – but now it happens. More, please.
I recently had cause to go to Baguio Villa in Pokfulam. I experienced something of a timewarp as if I was back in simpler colonial times. On the ‘retail strip’, along with the obligatory Park ‘N Weep was 4 or 5 property agencies that doubtless caters to all the basic needs of the residents. Let’s hope the retail sector gets back on a more equal equilibrium and we again see the stores we knew and loved, back in the ‘90’s, Midland, Centraline, HK Property etc ad nauseam, open for business again.
Fantastic news! This has really made my day 🙂
Burger King is essentially selling the same product as McDonald’s. The main difference is that McD’s is much better at marketing, i.e. dressing up their crappy food with an appealing (especially to children) image. When was the last time you heard a kid begging to be taken to Burger King?
“Local shops” are what you still get in the arse end of Wong Tai Sin, the ungentrified bits of Tai Kok Tsui, and the wastes of Ngau Tau Kok. It’s 30% garages/plumbing fixtures/air-conditioning repair, 25% tutorial centres, 15% cha chaan tengs, 10% real estate agents, 5% supermarkets, 3% pet shops and 12% random plastic junk.
Save for a few isolated pockets of wannabe cool (i.e. hipster cafes popping up in Sham Shui Po) it’s actually pretty dull. Nothing glamorous, or unique, or charming, or innovative. Just normal people selling normal, mundane, unremarkable household goods and services.
So when the Mainland tourism bubble bursts, one of two things would happen. Either people will be forced to revitalize local business by putting their entrepreneurial creativity into selling things more interesting than than gold and milk powder… or we’ll just go back to selling each other maths lessons and spare phone chargers.
It’s less Schadenfreude, more Shutterfreude.
What is the mindset of landlords who keep their empty premises vacant, rather than letting them at realistic market rates ? The boom has gone bust, the big spenders will never come back and the property market in general is set to implode over the next 2 years. If I was a landlord I would scramble to get somebody -anybody- to move in asap and start paying monthly rentals. It’s unreal to see how many shops are boarded up, not just in Wanchai and CWB but also in the backstreets of North Point and other slum areas.
and heres how much this ‘smart investor’ lost on this deal.
on top of ‘targeted at mainland tourists’ marketing and ‘hk rent’.
i feel so sad for him. hehehe.
yep real smart investor.
Did you know that McD is the largest toy retailer on the planet ? Nobody sells more toys than Ronald.
Not many people know this.
In this blog, mainland tourists and traders are decried,
But isn’t there another side?
If jewellery and watches take all the smart shops
Another, local, business simply drops
Down to a second- or third-tier mall,
Which would otherwise have fewer tenants, or none at all.
In the end, there are more jobs, and more business is done,
Which may benefit almost everyone.
Is every landlord a tycoon?
Tourists are also a boon
To small landlords; and if you own
Your premises, your business has also grown.
I’ve walked through some modest shopping centres
Where you might think no-one enters.
Retail is not in decline.
Amazing, how many small shops! Things look fine.
Some shops over-reach, others are pushed out. So it goes.
Bad shops open, good ones close.
Trade ebbs and flows.
But if you’d been on the staff of Burger King or Coach*
You’d have reason to reproach
Someone you saw smirking.
You’d wish you were still working.
* See Big Lychee September 8th http://biglychee.com/?p=14510