Traditional dining operators amongst hardest hit in Hong Kong’s local mall slowdown

Savills warns of growing challenges for Hong Kong neighbourhood retail.

Hong Kong's neighbourhood retail centres are facing mounting pressure from outbound spending and the continued growth of e-commerce, according to Savills.

The consultancy said local malls are increasingly exposed to spending categories most affected by northbound consumption and overseas travel. Hong Kong residents made approximately 117.5 million departures in 2025, equivalent to an average of 9.8 million outbound trips per month and up 12.3% year-on-year. Travel activity remained elevated in early 2026, with resident departures rising nearly 11% year-on-year to 30.2 million trips during the first quarter.

Savills cited market estimates suggesting outbound spending reached around HK$50 billion in 2025, representing roughly 9% of total consumption.

At the same time, online retail sales climbed 12.8% year-on-year to HK$35.7 billion in 2025, significantly outpacing total retail sales growth of 1%, which brought overall sales to HK$380.5 billion. In December alone, online sales increased 30.9% and accounted for 8.8% of total retail spending.

According to Savills, these trends are diverting a growing share of household expenditure away from physical stores, particularly in categories where convenience, price transparency and rapid fulfilment are important.

The impact is becoming increasingly visible in neighbourhood retail. Savills noted that traditional Chinese restaurants have been among the most exposed, pointing to the closure of House of Canton at Cityplaza in early 2026 after more than 40 years of operation, alongside other long-established operators that have exited or downsized.

However, the consultancy said the weakness is not universal across the food and beverage sector. More specialised and youth-oriented concepts continue to expand, with Taste Gourmet signing four additional restaurant leases in early 2026, while brands including Flat Iron Steak and Bakehouse have continued to grow through differentiated concepts and strong customer recognition.