City's retail sales hit 8-year high

Shanghai's retail sales jumped 20.2 percent in October -- the fastest growth in a single month since 2000 -- to 40.3 billion yuan (US$5.9 billion), the Shanghai Statistics Bureau said today.

October sales were driven by spending during the seven-day National Day holiday and thriving tourism and entertainment business, said the bureau.

In the first 10 months, Shanghai's retail sales expanded 17.7 percent on year to 375.2 billion yuan.

"The growth in retail spending has been steady and monthly sales have all surpassed 35 billion yuan so far this year," said Wu Yanrong, an analyst with the bureau.

"In October, people spent more money on travel, dining and other entertainment during the holiday and it fueled the highest monthly total since 2000."

During the National Day holiday, more than 4,000 outlets under the city's 386 retailers reported sales increased 20.12 percent from a year ago to 4.9 billion yuan.

Restaurant sales added 22.3 percent to 6.73 billion yuan last month and contributed 18.1 percent to retail sales growth.

Spending on food and daily necessities grew 20.5 percent and 20.2 percent respectively to 15.9 billion yuan and 18.8 billion yuan.

However, some analysts cautioned that the risk of a global economic downturn may eat into emerging markets and make people curb their demand.

Some department stores reported mild sales drops this past weekend despite big discounts and promotions.

"Facing the uncertainties in the economy, I have changed a bit in my shopping habits and become more prudent when buying big ticket items," said 30-year-old Eric Ding, who works in a foreign-funded company that has started to lay off employees.

Shanghai's economy gained 10.1 percent in the first three quarters.

To sustain the domestic growth, China in the past three months has cut interest rates, raised banks' reserve requirement ratio, expanded export tax rebates and increased subsidies to small companies

China also announced a massive 4-trillion-yuan stimulus package on November 9. It will be spent over the next two years to help boost the domestic economy. It will focus on infrastructure construction, upgrading health and education services, as well as improving the lives of people in rural areas.

(Shanghai Daily November 17, 2008)