HONG KONG - Hong Kong's retail sector is facing possibly its worst time ever, and even Christmas, the traditionally peak season for the sector, may not be able to reverse the trend, a recent survey and observation by analysts show.

With the social unrest raging on for more than six months, the Hong Kong Special Administrative Region (HKSAR) has witnessed the sharpest decline in over a decade in the number of tourist arrivals. Its retail sector, which has long relied heavily on tourists, suffered a double strike as the consumption of both tourists and local residents decreased remarkably under the shadow of continued violence.

Annie Yau Tse, chairwoman of the Hong Kong Retail Management Association (HKRMA), said earlier this week that Hong Kong's retail sector is currently in the worst situation since records began in the 1990s.

Tse made the remarks as her association released the result of a survey which shows that 97 percent of retailers in Hong Kong registered losses during the social unrest starting from June, and an increasing number of retailers have begun to ask staff to go on unpaid leave, cut down the number of employees or stores.

In the survey conducted from Oct 29 to Nov 22 on both chain stores and small and medium-sized enterprises (SMEs), about 30 percent of the surveyed retailers said they will reduce 10 percent of the staff if the environment does not improve or there are not enough relief measures, which will lead to the layoff of more than 5,600 employees.

Around 11 percent of the respondents plan to stop operation in the next six months based on Hong Kong's situation, the HKRMA said, adding that the estimated closures of retailers will reach 7,000.

Sa Sa International, Hong Kong's biggest cosmetics retailer which owned 118 stores in Hong Kong and Macao combined at the end of September, said it was planning to close 30 stores in a year after a loss of HK$36.53 million (about $4.68 million) during the April-September period, in sharp contrast with a 202-million-HK-dollar profit one year ago.

The hardship faced by the retail sector could be easily seen in the relatively cheerless atmosphere across Hong Kong even though Christmas is approaching. In busy commercial areas such as Tsim Sha Tsui and Causeway Bay, many stores used to retail clothes, cosmetics and food have been closed and remained unrented for months, while the long queues of shoppers in front of luxury shops are faded away.

"Hong Kong is bracing for its traditional sales peak season as the Christmas, the New Year and the Spring Festival will fall one after another in the next two months, an important period for local retailers to boost sales and meet annual targets," Chow Man-kong, deputy director of China Economic Research Program of Lingnan University, said.

"However, if the willingness to consume of tourists and local residents continues to languish in the prolonged social unrest, there may be a wave of closures of small and medium-sized enterprises and contraction of large chain groups, which will bring a heavy blow to the job market and even the entire economy," Chow said.

According to Tse, December and January, especially the period around Christmas, is usually the peak season that props up the whole-year retail sales, but the sales figures so far this month remain poor, and a big rebound is not expected at the end of the month.

Is peace restored in the community, retailers would still continue suffering losses, as it will take time for Hong Kong to rebuild its international image and for the retail sector to recover, Tse said.

She called on the HKSAR government to further implement its relief measures and hoped that landlords will take efforts to help retailers weather out the hardship.