By Donny Kwok and Anne Marie Roantree
HONG KONG (Reuters) - Hong Kong retailers said on Tuesday they expect sales for July and August to drop by double-digits from a year earlier due to large and sometimes violent protests that have gripped the Chinese-ruled city for more than a month.
On top of that forecast, the Hong Kong Retail Management Association also sharply changed its full-year retail sales forecast to a double-digit fall instead of single-digit growth.
It urged the government to resolve the dispute over a proposed extradition bill peacefully.
Millions have taken to the streets over the past month to protest a bill that would allow people to be sent to mainland China for trial in courts controlled by the Communist Party.
The retail group's statement came after a relatively peaceful rally descended into chaos late on Sunday, when protesters in a shopping mall housing some of the world's largest luxury brands threw umbrellas and plastic bottles at police who retaliated by firing pepper spray and swinging batons.
The retail industry "is worried that the incident will hit Hong Kong's international image as a safe city with good food and a shopping paradise," the association said in a statement.
Last month, PwC revised its Hong Kong full-year retail sales forecast to a 5% drop, from a 3% fall.
PwC also said recent political and social unrest, coupled with a lack of new tourist attractions, might lower mainland tourists' appetite to visit Hong Kong in the short run.
The Hong Kong Inbound Travel Association estimates that so far this month, the number of organized tours to the city has dropped 20% to 30% from the same period a year earlier.
"The impact has begun to surface and we start to see tours from mainland China and overseas postponing their leisure visits," association chairman Paul Leung told Reuters. "We hope both sides can resolve the issue in a peaceful manner."
The value of Hong Kong retail sales slid 1.3% from a year earlier in May, the fourth straight month of decline.
Hong Kong leader Carrie Lam on Monday called protesters who clashed with police on Sunday "rioters", and said she supported the police in upholding the law and seeking perpetrators.
(Additional reporting by Felix Tam; Editing by Richard Borsuk)