Uniqlo offers a pay rise up to 24 per cent to Hong Kong-based staff from February

Uniqlo will give a pay rise up to 24 per cent to its Hong Kong-based staff from this month, indicating labour is tight in local retail segment as tourists return.

Japanese casual clothing retail chain Uniqlo will give a pay rise of up to 24 per cent to its Hong Kong-based staff from this month, in a sign that the labour market for retailers in the city is tight as they prepare for an influx of mainland tourists.

Uniqlo and sister brand GU, both operated by Hong Kong-listed Fast Retailing Group, said in a statement on Tuesday that they will give a pay rise to their 2,540 store and office staff in Hong Kong, with top performers receiving 24 per cent, effective from February.

The two brands will increase the starting salary for store staff by 10 per cent to HK$17,000 (US$2,165) per month. Management grade employees – typically filled by university graduates – will see their starting salary increased to HK$25,500 per month while a store manager can earn up to HK$1 million per year. Annual leave for staff is also being increased.

The pay rise by the Japanese fashion brands, headed by Japanese billionaire founder Tadashi Yanai, is its first since 2021 and is much higher than the average pay rise expected for Hong Kong workers this year of 4 per cent, according to November data from consultancy ECA International.

“The strong pay rise at Uniqlo reflects that the local retail sector is in expansion mode as it prepares for the return of mainland tourists after the border reopening,” said Jerry Chang, managing director of executive search firm Barons & Co.

“However, it does not mean all business sectors will follow suit,” said Chang. “Many companies are still taking a cautiously optimistic approach on their salary policies as it will take time for the number of tourists to come back to pre-Covid levels.”

Hong Kong tourism and retail sectors have suffered from the impact of tough Covid-19 restrictions over the past three years. However, the border reopening between Hong Kong and China on January 8 has seen an uptick in tourist arrivals, with more expected to come as confidence returns.

Uniqlo, which means unique clothing warehouse in Japanese, plans to hire 300 additional staff in the next six months, according to the company statement. GU also plans to hire more but it did not give a precise figure.

The Hong Kong General Chamber of Commerce, the largest business group of the city, in January predicted that the local retailing sector could see a full rebound in the second half of this year. The chamber predicted 10 per cent growth in retail sales this year, and overall economic growth of 3.8 per cent this year.

The chamber expects the jobless rate to ease further to 3.3 per cent for 2023, compared with a 10-month high at 5.4 per cent in the February to April period in 2022, during the fifth wave of the pandemic.

Some 280,000 people crossed the mainland-Hong Kong border on February 6, the first day all test and quota requirements for cross-border travel were removed. This is still short of the pre-pandemic daily average but augurs well for a future increase that will likely boost trade and tourism across the Greater Bay Area.