Retail Sales Fall: Lowest Since 2005

March 22, 2011

During January 2011, local retail sales fell by 5.9% to an estimated $74.6 million, marking the lowest sales level recorded for the retail industry since February 2005, according to statistics released today [Mar.22] by the Department of Statistics.

bermuda retail sales jan 2011

All sectors experienced year-over-year declines with the exception of service stations, which reported a marginal gain. Overseas purchases declared by travelling residents increased by 2% to $5.1 million.

Combined local and overseas spending totalled $79.7 million, a decrease of 5.3 % compared to the level recorded in 2010. After adjusting for the annual retail sales rate of inflation, measured at 2% in January 2011, the volume of retail sales contracted by 7.8%.

The full 4-page report is below, click ‘Full Screen’ for greater clarity:

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  1. Chart says:

    The PLP love to boast “well look at how much better the economy is now than when the UBP was in power’.

    We’ll they’ve now lost more than half of the “uptick” … and my guess is that we will soon be back at c2000 levels.

  2. Terry says:

    Well I’m glad. Now ‘Tail’ costs less. Maybe crime will fall to. I mean this gives new meaning to ‘DeTail’…….Gotta run……I need a cocktail……..Hery!!! Bartender …geeve me a shot of Moloctov on Dee Rocks……….

  3. HMMM!!! says:

    Hmm i wonder why its the lowest? i know why!!! cause everything is so expensive!!!!! thats why everyone shops away when they go away.

  4. courtenay says:

    I have no sympathy.

    Bermuda needs to get with the rest of the planet and stay open past 5-6pm. This could potentially be their solution to increase spending from residents and also tourists?

    Its not the 1950′s any more lets start accommodating and giving good customer service….

    If your not open how do you expect to sell?

    • just fishin' says:

      For the tourists quite a few of the stores which sell visitor-related goods do open late in the summer. The stores in the large hotels are open late most nights much of the year…..a handy fact for locals to remember.
      For the locals….there’s a problem. A great idea but do the maths. It’s all about the volume of sales. And it’s not a matter of educating the customers…the numbers don’t work in Bermuda. Many stores would like to open but it’s been tried and it does not work unfortunately. If the business was there please don’t think retailers are stupid, they’d be open.

  5. imjussayin says:

    Bermuda is too expensive and lacks variety….buy bda will make you broke with nothing to show for it

  6. On My Way To The Poor House.... says:

    ..And the sales will continue to fall if they keep up with these prices…Such a shame that we can’t live without food because the grocery stores need to be taught a lesson as well..they have just about every excuse there is to justify the cost..long gone are the days when you could buy a loaf of bread and a container of milk for less than $10.00……Pretty soon I am going to have to show up at friends’ house/s just in time for dinner….

  7. just fishin' says:

    Yeah, you have it right! And there’ll be others commenting as they every time the stats are released. SO here’s my spin on the problem.

    Don’t blame the retailers.

    I’ve found prices have come down in the stores by comparison over the past years.

    No one can compete with the likes of Wal-Mart……that’s why other retailers in the US hate them opening up in their areas. There are other discount stores as well with their buying power and the size of their market. In Bermuda a market of 65,000 souls is not enough to allow the economics that feed US stores. You’ve heard of location, location, location? That’s really about volume, volume, volume.

    Consider store rent paid in Bermuda, especially in Hamilton, compared to the US.

    Consider the demands of Bermudian voters…….Bermuda’s retailers (and others) fund not one but two pension plans, (one is a percentage of payroll), an (unhelpfully progressive) payroll tax, and medical/dental insurance. Retailers in the US pay how much by comparison? Do they even pay health insurance.(Dental insurance? You’ve got to be kidding)….remember that up until now over 20 million Americans have had no health insurance and I’m sure some of those 20 million are employed, some in retail. We want our benefits here in Bermuda but we have no care presumably for the American worker. We are treating Americans just as much of the world treats the kids who make bling sneakers in the Far East…take advantage of them and to heck if they don’t eat properly or have health insurance. Health insurance out there with those kids? Check out the life expectancy of these people in Thailand, probably less than 50 years.

    Whilst you are checking out those numbers check out the infant mortality rate in the US. According to the CIA World Factbook on Wikipedia the US is 46th on the list. And where is Bermuda? It’s number 2. Make the connection with health insurance? And costs?

    Consider the high cost of labour. It’s all very well that we complain about the high cost of everything in stores but let’s take a look at what our own salaries would be in the US (after Federal tax, after State tax).

    Consider the fact that duty (our version of a sales tax) has to be paid up front before the item can come off the dock. (Someone above did mention replacing Customs Duty with a sales tax…. not a bad idea…although there are many many issues there too). Paying duty up front means that the retailer pays tax on the item even if it does not sell for one reason or another (stolen, damaged).

    Consider the fact that the charge to move a shipping container from the US is around $3,000. How many bags of Huggies diapers can one get into a container where that cost has to be added?

    Consider that the retailer knows that they have to carry as wide selection as possible and therefore needs to warehouse what is not on the sales floor. The rent for that warehousing compared to rent in the US? Consider that the travel time from the US supplier to Bermuda in about 3 weeks so for the most part so there is no such thing here as last minute delivery. There’s no getting around the need for warehousing. (One week to process the order and deliver to a US address. One week to containerise and get on a ship to Bermuda, one week, give or take, to process the cumbersome Customs paperwork, pay duty, arrange delivery to the retailer). Sure it can be FedEx’d in or air-shipped in but that does something nasty to the price.

    Consider what a community of 65,000 in the middle of nowhere in the US has on offer on their Main Street. Do folks have to travel out of their small town to the big mall, built between several similarly sized towns, to get a better selection at lower prices? Compared to a small town of 65,000 anywhere in the world I wager that there is a better choice here. Just the same as residents in that middle-of-nowhere-town when we shop away we are taking advantage of the benefits of a huge market on our doorstep, with low(er)costs. Our situation as shoppers in the middle of the Atlantic instead of that US town is no different.

    Consider now your own business, the job YOU do. What do YOU charge or get paid compared to your opposite number doing the same type of business/work in the USA? Clerical workers…….Lawyers at $900 an hour, retiring at what age?…… Building contractors at how-much-a-square-foot? Doctors, dentists, accountants. Civil Servants.

    My guess is that the Bermudian retailer is under a lot more pressure to keep their prices down than any of the service providers above who for the most part have to carry little inventory, if any. We have to use the local service providers, no choice but to, and they know it.

    In most cases the retailer in Bermuda is actually making less profit on an item than their opposite number in the USA, even though in Bermuda the price tag is higher.

    We all compare our prices in Bermuda to the US. Have any of us travelled to Europe and seen the prices there? Some of us have travelled to the Far East. Prices are sure cheap, but I wonder what the accountants, the blue collar workers, the doctors, and the civil servants are earning there? I wonder what their health coverage and pension benefits are? But what do we care? It sure is cheap to shop.

    But WE all know, and wonder why, none of the retailers have any brains at all. They doddle along not listening not caring, oblivious of Economics 101, just charging whatever they feel like, without any care or worry. Why are they not as bright as we are in OUR businesses?

    We can do better than that……I think we’d better open our own store.
    (Sorry about the CAPS but I can’t underline words).

    • Rockfish#2 says:

      Food for thought—–enlightening!

      • BUY BDA....ummmm no thanks says:

        I am a student in the uk and health care is free and there are alot of benefits that the government offers to every age and students get discounts in almost every clothing store. the shirt you see in a store in bda selling for $30 you can find in primark for 2 pounds (GBP)….oh no im sorry nvm you might not see that shirt the 2 pound shirt probably better..for the record 2 pounds is $3 and some change…..but thanks for the info it was very informative I have never seen a break down like that and you have changed my mind about how I feel about Bermudian retailers but i havent shopped in Bermuda since 2004 and now that I live away I definitely wont start now.

  8. Jim Garlic says:

    2005… I’m still wearing cloths bought that year in BDA,wait a minute thats the year I took up a 25 yr mortgage…Interest rates are sure keepin me up at night,,haven’t supported the local restaurants that much either,,been brown baggin it for a while.The only reason I haven’t shopped in BDA or abroad for that matter is because I’m currently servicing a very huge loan…Not to mention that I personally know at least twelve other couples with so much more month at the end of the money!!!
    P.S…couldn’t afford to pay rent anymore…giving away my childrens inheritence to greedy landlords..Who don’t deserve a dime.

  9. Hmmmmm says:

    Just fishin good analysis. I don’t agree with all you’ve said but I respect the analysis. However, the same attitude that says “we don’t want a collapsible beach bar” is what accounts for the disinterest in local retail. It is dead because they refused to recognise reality and all the duty relief in the world will not bring it back to life. It means recognizing that our life patterns have changed. I can remember when you couldn’t see a car on the roads on Sundays. Now its like any other day….but the important thing is, those people are going somewehere, looking for something…and if its open they’ll patronize it.

  10. Chart says:

    Retail is dead because 1) we don’t have tourists anymore, and 2) the population of Bermuda has sharply declined.

    With fewer shoppers, it is even more difficult for retailers to 1) stock a decent selection, and 2) cover the high cost of doing business in Bermuda.

    In short, you can be a great store and still struggle in Bermuda.

  11. Chart says:

    “In most cases the retailer in Bermuda is actually making less profit on an item than their opposite number in the USA, even though in Bermuda the price tag is higher.”

    This is a correct statement.

  12. Terry says:

    Enjoy it Hmmmmm. Won’t be to much open in the future except vegatable stands and stolen produce from your backyard.

  13. Concerned Bermudian (original) says:

    Overseas shopping still up 2%.

  14. Apolcalypto says:

    Please don’t imply that we as a consumer are stupid or have no clue what we are talking about either !!! And that’s such a Bermy get out clause….. That is has been tried before but didn’t work. I have lived here for almost 10 years, and I have previously worked in retail and I don’t ever recall that happening. Apart from when Triminghams used to be open a little later 1 night a week.

    • just fishin says:

      Triminghams (and look what happened to them) was not the only store in town offering late openings. They trialed opening several nights a week over the years, as did many stores.

      You’ve worked in retail. What was the size of the population in your area?

      “It’s such a Bermy get out clause” Hmmm. In the capitalist system the get out clause is to read the bottom line.

      • Justin says:

        You’re right. That’s what capitalism is essentially. But can you imagine a Bermuda, for example, where you can’t even buy a TV without having to order it from the US? I’m not sure about everyone else, but if I don’t save $50 or more, it’s simply not worth it to shop overseas. At some point you have to put a price on convenience, and the idea of supporting your own. Bermuda is in economic hardship and I think long and hard before sending my money overseas instead of keeping it in Bermuda.

        • The truth shall set you free says:

          It’s too bad our leaders don’t have the same mentality, given the millions of dollars paid to overseas consultants to pump up economies in other places.

          • Hmmmmm says:

            Hate to break it to you, but those overseas consultants are the ones who fixed HIP so that we now have claims paid faster and a true picture of the fund. Our “local expertise” had us believeing there was a surplus all thse years when in fact it was their inefficiency that was causing it to look that way. You knock overseas consultants all you like but until Bermudians up their game they’ll continue to make money here. Right back to retail….overseas spending up year over year for the same period……proves we know overseas quality is better right now.

            • The truth shall set you free says:

              And I hate to break it to you, but not every overseas consultant has been brought in to work on HIP. How about Mr. Henry Johnson, brought in to ‘fix education’ to the tune of 250k a year. How’d that work out for us? How much tourism has Globalhue, with a 28 million tenderfree contract, gotten us the past 3 years?

            • LOL (original) says:

              So what’s your take on Global Hue? Sorry Bermudians have been and all ways will be the thing to help Tourism, did we really need a foreigner to tell us what Young Black Male study said or how about the study on the education reform Hmmmmmmmmm………I might add that these report get done and then are only half followed or are completely shelved. Any comment Hmmmmmmmmmmmmmmmmmmmmm…………… Did not Trimminghams have a foreign guy try to run it like a Macy’s before it tanked. The PLP and it followers keep changing their veiw of things they may as well adopt the UBP’s name and call it quite to the Progressive Labour Part.

              LOL

  15. Fed Up Bermudian says:

    The drum I’ve banged for years has been ‘if you treat me right from the moment I walk in your door, I’m likely to spend something’. Maybe I don’t have the buying power I used to before this recession, but I have actually walked into a retail location- I won’t name names- where the gal behind the counter saw me, and HELD A HAND UP TO ME because she was having a tiff on the phone with her boyfriend, and using some pretty colourful language at that- are you serious??? In what alternate universe is this acceptable behavior in the workplace, let alone in a retail shop???

    Another time, I went into a local bookstore, and the teenager manning the counter was eating cheese curls- LICKED HER FINGERS OFF then reached for my stuff. Sorry, that’s just gross. NO one teaches staff about proper etiquette or customer service!! I left my magazines on the counter and walked out. I know all sorts of people with all sorts of germs handle things, but I don’t have to see it. And I don’t want to watch some kid eating at the counter as my greeting to the shop!

    Or- how about this- I was lied to at an electronic store in the city (you can figure out which one) so I would make a purchase- a $150 cable that’s really only worth around $20 in the states. I asked at the time of purchase if I could exchange it if it was unopened, salesgirl said ‘Sure, no problem’. I went back to exchange it after having taken it home and hubby telling me it was the wrong thing, and the SAME salesgirl pointed to the tattered sign with small letters behind her- ‘Positively No Returns’ or something equally rigid. I tried to call the store owner several times over the next six weeks, and never once was he either available nor did he return my calls. I gave up and made a decision about where I won’t shop. Here’s the kicker- I’m so embittered that if their competition doesn’t have it, I’ll bloody well shop overseas, pay the duty and shipping, but I won’t shop there again. And I tell my friends and family, and now anyone who’s reading this. So think about that for every customer you screw. How much sales did you lose as opposed to allowing a simple exchange? When times were better, you didn’t care, and you got into bad habits. Now that times are leaner, you scream that no one buys Bermuda and it’s just not your fault. Really? Seriously??? Look in the mirror.

    And at another boutique on Front Street, I bought a jacket that fell apart after having worn it about four times. I went to return it, the seams were very poorly done despite the designer label- I sew and I do know what I’m looking at, and this wasn’t quality. I’d have taken store credit rather than a refund of cash. They told me to send it back to Italy and I wound up having to take them to court. I got my refund in the end, but I’ve never shopped there again.

    So- retailers, think about a few things. Customer service is paramount. I would buy Bermuda if I didn’t think most of you were out to screw the public blind and squeeze out every cent with avarice in mind. So many of you would rather make a sale than build a business. There are notable exceptions- the new gourmet chocolate shop on the corner of Queen and Reid, and Pulp and Circumstance. Gibbons actually has improved enormously, too. But look at whose heads are generally above water and who usually don’t complain. Yes, sales are down and times are hard, but a fair profit on a decent selection with staff who actually care about what they’re doing would be a welcome change in most establishments. I would happily forego shopping trips away if I felt that retailers actually cared.

    • The truth shall set you free says:

      What was the electronic shop? If they did that to you, they deserve to have their name called.

  16. just fishin' says:

    To Fed Up….I agree that you have every right to be disgusted with the issues you’ve had to deal with. Don’t forget the Dept of Consumer Affairs and The Chamber of Commerce. A letter to them with a copy to the store owner in question if it does nothing else will hopefully cause the latter to identify where there is room for improvement in their business.
    I afraid that I don’t agree though with your comment that most local retailers are out to “screw the public blind”. Retailers know the customer has choice and most retailers have for years priced accordingly, certainly since the 70s when more locals started to travel. As I’ve mentioned before, retailers in the US make more money with their markup on an item than local retailers make when they sell the very same item at a higher price here. Not WalMart (and similar) which no one can touch,not even in the US, but a regular store. And don’t forget that most of the stores most of us buy in when we are away are chains with higher buying power, to say nothing of lower business costs.
    There is NO excuse, however, for bad service. Use the services of Consumer Affairs or the Chamber of Commerce.

    • Fed Up Bermudian says:

      I am happy to back off a stance, but maybe it’s just the stores I’ve been to, and the fact I hate shopping so much to begin with. But, when you see- repeatedly- staff that couldn’t care less if you were standing in their shop, when you see grocers charging the moon and the stars for half-rotted produce, then it’s difficult to draw a more generous conclusion! How many of us actually bring stuff back to the grocery if it’s gone off? We don’t. We don’t demand any better, so that’s what we get. Maybe I’m just a magnet for this sort of thing, but I was told by one shop owner that I was the only one who complained and how dare I, another was so rude in return- seriously, I don’t understand why you wouldn’t want to know if your shop was missing the mark! So really, my level of sympathy is minimal at best. I respect your viewpoint, and sure- you can’t compete with Walmart, but Walmart costs a plane fare and hotel stay, not to mention the customs duty. I’d rather keep my paycheck here, and not see Hamilton become a ghost town like St. George’s.

      • Getaway says:

        Let’s turn this around a little. Does anyone have stores that they would recommend because of their service, product selection and prices? In other words let’s promote those stores that are working.

        Any suggestions?

  17. just fishin' says:

    A couple of things in response to BUY BDA.
    I’m a supporter of the UK Health Care system. There certainly are horror stories but where aren’t there? The majority of Brits like the system…it’s their country..so who is anyone outside to moan about it? All this to say, however, is that it most certainly is not free as you contend. It’s paid through taxation. Ask someone who receives a salary how much. Here at home we are required to pay a private nsurance company for health insurance…in the UK one pays the Government for health insurance. (If folks in that part of the world who complain about our supposedly low taxation rate in Bermuda would add what we pay here in health insurance into the mix they would see the numbers start to change.)

    I’ve studied and worked in the UK as an expat, and it’s great that you are there to study as well. Being there, or anywhere out of Bda, is an education in itself.
    I’d like you to consider the 2 pound shirt though. Whilst over there I too would buy packs of great shirts…3 for 10 pounds from ASDA (a Walmart company)…underpants? Cheaper to buy than washing! I am one cheap person and loved it. But then I saw a programme on the BBC about ASDA, Primark and a few others that had to do with the manufacturing of these clothing items. The conditions in the factories, the employment conditions, the pay. If the shirt you buy in the UK is being sold for 2 pounds…think about what it cost to package, to ship from the Far East,to get from the UK port to the Primark distribution centre, to get from there to the shop, and then to the shelves.What on earth was the factory paid for the shirt to begin with?! It stopped me in my tracks, didn’t buy anymore from that day on. Now you, as a student and I’m presuming maybe incorectly, are young, and probably quite rightly feel more “Green” than your parents. You recycle, you turn light switches off, you feel empathy for those in Greenpeace. If I, as an oldie, can do one thing for your future, it’s to have you do some research online about these 2 pound shirts. Sure in the high street shops you will pay a bit more but please stop supporting those sweat shops! And P.S. I KNOW what Primark looks like on a Saturday afternoon…like a war-zone…I don’t think that shoppers here would accept that “look”…they’d turn tail and run!!