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Local consumer sentiment for Christmas is lower compared to last year, and people are likely to spend less during the holidays, shows a study, which is certainly not good news for retailers in Hong Kong.

Around 24 percent of Hong Kong people expect to spend less this Christmas compared with the last one, according to a survey conducted by the Hong Kong Research Association between Dec 1 and 9.

Polled were 1,071 Hongkongers over 18, among whom only 13 percent said they plan to spend more this Christmas, while 47 percent said their spending would be largely the same as last year.

The remaining 16 percent were undecided on how much to spend.

That makes it the first time since 2010 that people who plan to cut their Christmas spending outnumber those who want to spend more, according to the survey.

When asked about their budget for this Christmas, 79 percent of respondents said it is less than HK$2,000, while just 17 percent said they will spend more than HK$2,000. This indicates that local consumers may have tightened their spending limits for Christmas, because last year's survey had 19 percent of respondents saying they planned to spend more than HK$2,000.

Also, more people believe that the economic situation in Hong Kong is less than ideal, the survey suggests.

A total of 45 percent of respondents said they believe the current economic situation is not good, while last year 35 percent held the same view.

Only 7 percent of respondents believe Hong Kong's economy is in a good state.

The Hong Kong Research Association believes that local consumer sentiment has been affected by the tension caused by "Occupy Central" as many respondents also said the festive atmosphere for this Christmas is not very strong.

Meanwhile, many Hong Kong people expect interest rates to go up soon and the mainland economy will continue to slow down, both factors undermining their willingness to consume, the association said.

As the Christmas holiday is one of the most important peak seasons for local retailers, the association suggests that sellers spend more resources in creating a festive atmosphere for consumers to relax and enjoy the holiday.

(HK Edition 12/24/2014 page9)