Daiwa: August Mainland Retail Sales Growth Misses Expectations, Demand Remains Weak

Daiwa released a research report stating that mainland retail sales in August fell short of expectations, with demand remaining weak. Among the categories, communication equipment performed most notably, growing 27.3% year-on-year, driven by continued increases in average selling prices and a product upgrade cycle; alcohol and tobacco sales accelerated to 12.5% year-on-year growth, compared with 6% in July, possibly benefiting from improved banquet consumption and a lower base. According to the report, home electronics returned to positive growth, up 2.3% year-on-year; cosmetics grew 4.9% year-on-year, and although slightly slower than last month's 6.8%, performance remained better than other sectors; beverages improved from 3.5% in July to 4.9% year-on-year growth. In the hotel sector, the bank estimates that August revenue per available room (RevPAR) improved from a 3% to 4% year-on-year decline in July to low single-digit year-on-year growth, benefiting from improved weather driving summer travel demand, but will face a higher base starting mid-September. Sports and entertainment goods saw their decline narrow to 4.8% year-on-year, compared with 10.6% in July, though demand and the competitive environment remain unfavorable. Gold and silver jewelry saw its decline widen to 17.5% year-on-year, compared with 10.1% in July, affected by spot gold price volatility in August and a high base.