Opinion: Famous On Retail, Purchasing Power

May 7, 2014

[Opinion column written by Chris Famous]

Recently, Finance Minister Bob Richards attempted to dismiss the recent Employment Survey that showed 1,166 job losses. He instead pointed to February’s Retail Sales Index [RSI], as proof that the economy was “turning the corner.” In order to appreciate the lunacy of that statement, one must understand the RSI.

7 Sectors

The RSI is but one key economic indicator used to measure the economic health of a country and is used to measure both the monthly and annual retail sales activity.

The RSI is structured into seven sectors:

  • Food Stores
  • Liquor Stores
  • Motor Vehicle Dealers
  • Service Stations
  • Building Materials
  • Apparel Stores
  • All Other Store Types

Tracking these various sectors allows us to see how the economic forces are impacting the various subcategories. For example, in February there was an increase in the Motor Vehicle sector and the Food Sector. While car sales reflect an increase in demand by a select few consumers, food sales were only up as a result of an increase in prices, and not due to an increase in demand.

Value and Volume

The RSI reports both the Value & the Volume of retail sales. The Value Sales is the dollar value of the goods and services sold. The Volume Sales is adjusted to factor in the inflation rate and as such, is a more accurate reflection of today’s market conditions. For example in February, the percentage change in RSI Value sales showed an increase of 1.4%. However, factoring in the rate of inflation of 1.0% in February, the percentage change in RSI Volume sales showed an increase of a mere 0.3%.

This 0.3% increase is hardly an indication of an economy that is “turning the corner.” To dismiss the grave realties that come with these 1,166 job losses by pointing to a 0.3% increase in retail sales as is irresponsible. MP Richards is an attempting to distort the hardships that an estimated 3,000 unemployed Bermudians are facing.

Facts over Fiction

OBA is claiming that the PLP will “say anything – distort, mislead, exaggerate, insinuate – to make the OBA Government look bad.” The truth is that the PLP is merely pointing out facts and these facts are based on statistical data collected under the OBA leadership.

The OBA attempts to dismiss the increasing number of unemployed so they can also justify their failure to aggressive address this issue. We must first recognize the truth in order to implement viable solutions.

Support Retailers

The PLP is offering solutions. One solution is to encourage the “Buy Bermuda” philosophy. While the Department of Statistics currently does not track online purchases, the RSI does report what residents declare when they return from overseas trips.

In February 2014, returning residents declared an estimated $3.0 million in spending overseas and $63.2 million from February 2013 to February 2014. Can we continue to afford to allow other jurisdictions to benefit from our spending while our own economy struggles?

With more Bermudians facing unemployment, it is incumbent upon us as consumers to use our purchasing power more wisely. I urge each of us to become more conscious consumers and develop an awareness of which businesses we choose to support.

Support businesses that support Bermudian workers and follow fair employment practices. It is time that we support our own with our purchasing power.

By doing so, the OBA would not have to tweak the numbers.

- Chris Famous

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Comments (42)

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  1. I Speak for everyone says:

    Use eBay. Find international shippers use regular air mail. Win.

    Buy Bermuda is a joke.

    • Mile High Club says:

      I hope you remember to contact eBay the next time you, your association, and event you are hosting or your childs school is in need of funding, sponsorship or raffle prizes!

    • Doubting Thomas says:

      @I speak foe everyone. You speak for the few ignorant and selfish. I trust that the words that you use the most each day are “Me” and “I”.

      • Steve Biko says:

        As much as I want to buy Bermuda, 5 power tools from Home Depot $500.00, 1 power tool in Bermuda $500.00 !!!!!!!!!!!!!!!!!!!

  2. inna says:

    you, my friend, are simply confused! point. blank.

  3. Girl on Fire says:

    I’m not trying to take dismiss the credible point to be an educated consumer, but Buy Bermuda is hardly new. I’m not sure you can claim credit that is a PLP solution to our current woes either when it as been in place since 2010 and if it hasn’t worked by now, it’s not likely to have more of an impact. In fact, one point you are not including is that overseas spending has actually DECREASED year on year (11.8%, same source). Explain to me again how Buy Bermuda is the solution? Because given that local sales minimally went up, and overseas sales went significantly down, it seems like the Buy Bermuda message has already been received and acted upon!

    Bermuda does not have the ability to bring in every kind of product, so there will always be overseas purchases, because that’s life when you live on an island.

    One way for retailers to increase sales is to have a better web presence. I have no time to shop during the day, and they are all closed around 5pm. That’s not helpful. But if I could order online and have it delivered next day, then I would shop more. I don’t buy overseas because it’s cheaper, I buy it because it’s convenient. If retailers here would use web technology, they’d have more customers. One of the reasons I love Red Laser – they deliver directly to me, quickly and for free! This would also mean hiring more people (delivery services and web designers). Government could also provide incentives if businesses then needed to adopt new technology (scanners and the like) by giving them duty relief.

  4. Terry says:

    Chris.
    You still work at BELCO right?
    All business support Bermudian workers. HELLO.

    Now when you and yours friends open a fresh frozen vegetable process plant supported by Bermudian Farmers let me know.

    When you and your friends open a KIA/Toyota plant in Bermuda let me know.

    When you and your friends and the PLP open a Farm that raises Beef/ Chicken/Turkey let me know.

    When you dig a well and strike oil………………………..

    The writing is on the wall and it ain’t Black Watch Pass nor Scaur Hill.

    Must be money left in the fund for this propaganda.
    $800 and still earning INTEREST………………………..
    The grapes are good this time of year.

    • Common Sense says:

      Terry,
      Can you remember when the BIU owned and operated their own Co-op shop? This was the perfect opportunity for an organisation to keep prices to a minimum for their workers. They could have imported their own goods in bulk and undercut all the other grocery stores in Bermuda. And what happened to the BIU Co-Op? It was so badly operated that it collapsed and closed, never to be seen again.

      There is absolutely nothing stopping the BIU from re-opening their own grocery store again, and if properly managed people would shop there in droves for the cheapest prices. I wonder why they don’t do so. Can anyone explain why?

      • Doubting Thomas says:

        Can you imagine what would happen if they closed the doors and left every time there was a march, dispute or meeting?

  5. North rock says:

    What a waste of space. Does this guy have a job somewhere ???

    • anon says:

      Yes he’s paid by the PLP to market their brand

  6. Jim Jones says:

    How many consecutives months of decline in retail were there before February?

    • Lauren Bell says:

      RSI Year-In-Review:-

      Feb/Mar/Apr 2013 – down
      May 2013 – up
      June 2013 – down
      July 2013 – up
      Aug/Sept 2013 – down
      Oct/Nov 2013 – up
      Dec 2013 – down
      Jan 2014 – up

      Famous is right – it is far too early to point to the RSI as an indication that the economy is improving. ESPECIALLY when u look at what is driving the up-swing. Food sector is up NOT because consumption is up but because the price of food has gone up! The increase in car sector is driven by purchases by a select few consumers.

      Famous is also right in that it is important for the general populace to understand what key economic indicators can (and can’t) tell us

      • Mile High Club says:

        So, if they had reported nothing and said it was to early, he would not have found reason to complain? Give us a break. At least we have hope now!

  7. Serengeti says:

    In 2010 the PLP commissioned an American artist to make a bronze statue of Lois Brown Evans, to go into the new court building. The cost was $218,000. Local artists, many of whom have international reputations for excellence, such as Desmond Fountain, were never approached.

    When in control of the purse strings and spending someone else’s money, it was ok for the PLP to ignore Bermuda’s economy and to “allow other jurisdictions to benefit from our spending while our own economy struggled”, to use Famous’s words.

    Just pointing out facts, Chris.

    • inna says:

      Or just like a certain rockstar Premier and his construction buddy, who was awarded an substantial contract to clean up the Port Royal golf course back in 2009 and bought in a crap load of overseas workers, who were supposedly more qualified, and at a cost significantly cheaper than local labour… and guess who pocketed the difference??

      Politics is politics, and i could care less for either party, but majority of level-minded thinking Bermudians are probably in the same boat as I and mud-slinging is doing absolutely nothing to solve this crisis we are in!

  8. IP Man says:

    Or maybe folks finally had some disposable income after paying off their December credit card bill. Either way you can’t take the RSI value seriously because it doesn’t count online sales.

  9. Kangoocar says:

    The only thing I can agree on with him is the supporting local biz stuff, may I suggest he stand down the airport daily and advise all those people coming out of the airport carrying overseas shopping bags of the damage they are doing to themselves and fellow Bermudians when it comes to the safety of their jobs!!! How about it, Chris ???? Also don’t forget all the next day carriers as well, you can do that easily in between our sparse flights arriving daily thanks to your plp!!!

  10. jt says:

    Wow – this rambles here and there more than my kid’s homework.

    The central message of Buy Bermuda is a good one (if that is the central message – or is it really something else cloaked with care and concern?) . I think Buy Bermuda was a Chamber of Commerce campaign initially and not a PLP light bulb moment…not that it is a remarkable idea that anyone wouldn’t come up with.

    I must have missed CF’s simnilar letter written when Ms. Cox proclaimed we were heading out of the recession – despite zero supporting evidence. Or did I?

  11. ganja mon says:

    If Bermuda retailers had listened to consumers for the last 10 years they would have realized people are not robots and do NOT have to purchase from them! Why would I purchase a small cooler from Gorums for $100 when I can get a bigger one from Walmart for $30, and pay $20 to bring it in. I’ve saved $50 dollars, purchased a better cooler and only had to wait 2 weeks, if that! Dont get me started on clothes! There is no reason for some companies to have such a huge mark up!

    There is nothing wrong with buying outside of Bermuda as long as we pay the duty/ taxes to get it here. Government has made their money off of my purchase outside of Bermuda…Retailers need to do better to get all of my money!

  12. Mike Hind says:

    “One solution is to encourage the “Buy Bermuda” philosophy.”

    This is not a solution. It’s barely a plan.

  13. Serengeti says:

    “Again, an opinion piece written by an PLP member who is not an elected official, is not a part of the Shadow Government team, speaking for the Shadow Government. This is a sad indication that the Shadow Government CANNOT BE TRUSTED to speak for itself!”

    (Quoted from Question, the PLP guy. He apparently thinks you unelected spokesmen should keep quiet, Chris).

  14. BlueFamiliar says:

    Regarding the notion of ‘Buy Bermuda’.

    In my experience, there remains a mindset that everything can be gotten cheaper off island. And while this might be true, you need to consider how much more expensive something is and what the benefit might be to paying a higher price.

    Sometimes it makes sense to pay a few extra dollars to purchase something on island. Sometimes it doesn’t. The key is making the effort to learn which is which, and to call a retailer on something when the price is exorbitant. Admittedly you might not get a good response, but do it anyway, they might eventually take the hint.

    So, this all said, I’m a big believer in Buy Bermuda, but with the caveat of Buy Wisely.

    • That makes sense ... says:

      It makes sense to buy locally if the price differential is reasonable. But a lot of merchants haven’t figured that out. They still think that we’re still in pre-internet days when we had no choice but to buy locally and they could mark up the price of goods to their hearts content (not to mention selling last year’s models).

      There was a recent letter in the media where someone said they’d been looking for an O-ring for their pool. Price thru Amazon $5.95. Price locally $36.00. Sorry but, at that price, unless it’s an emergency I’ll buy off island – if it had been $12 or even $15 I’d probably have simply bought from the local merchant. But not with a 500% markup.

      • Ride says:

        Bring in three.
        Keep one as a spare.
        Sell one on Emoo for $25.
        Zero cash with a replacement, a spare, and a discount for someone.

        Some (not all) retailers just don’t get it.

        Ride

      • BlueFamiliar says:

        Yes, I saw the letter, and I’ve experienced similar, but I’ve also experienced the opposite, as well as finding items I wanted at a reasonable price.

        If anything, I would say that the majority of local merchants are aware of the necessity for change, and while they might not have changed far enough yet are headed in the right direction.

  15. I only get paid so much says:

    I only get paid so much, if I have $500 to spend at the end of the month then I only have $500 to spend. If I buy overpriced items from “Buy Bermuda” then that leaves me with less money (or none) to spend on restaurants, movies, plays, festivals, charities, etc etc, which also supports the Bermudian economy.

    The key is Spend Your Money Wisely (everyone only gets paid so much!)….

  16. Bermuda Boy says:

    Here we go again! Mouth Almighty famous famouss famousss. Take a break and let someone else that really cares have a turn.

    • inna says:

      i am sure that he really cares, its a shame he is so blindly loyal to the party that doesnt care!

  17. Chris Famous says:

    Thank you for taking the time to read

    Opinions will vary

    However I do not think anyone will disagree with supporting Bermuda businesses

    • 1984 Island says:

      You can’t mandate that people support Bermuda businesses if what they want/need is not available or overpriced. Take women’s clothing for example, the Bermuda boutiques are limited in style and the price to quality ratio is very high. I would much rather pay the unreasonable duty and get what I want from New York or Toronto.

    • Mike Hind says:

      No one disagrees with supporting Bermuda business.

      However, some might disagree that it’s a solution…

  18. Huh says:

    OMG – he says that PLP are offering solutions (plural) then offers one idea – something that the Bermuda Chamber of Commerce has been doing for years. Just image how much worse our economy would be if they had been reelected!

  19. nuffin but the truth says:

    Infamous speaks a load of bollocks again,give it a rest and stay with Belco and be thankful you have a job,many don’t.

  20. Alvin Williams says:

    Business who openly boast that they don’t hire Bermudians can not expect to get my Bermuda dollar consumerism has not gotten political.

    • Mike Hind says:

      Who is openly boasting that they don’t hire Bermudians?

    • Sandy Bottom says:

      Yeah Alvin. Who openly boasts they don’t hire Bermudians?

  21. Nancy says:

    Well written fact based article Mr. Famous. Great facts to support your position. Well made points.

    • Sandy Bottom says:

      Stop it. You’re making us puke.

  22. Gotham says:

    If anybody is costing this country lost jobs and investment, it is rogue PLP spokespersons like Mr. Jamahl Simmons. Mr. Famous, I think it would be very helpful if you and other responsible leaders in the Party categorically condemned Mr. Simmon’s remarks over which he has apparently resigned his PR position. Indeed, an even stronger statement of your undoubtedly honourable intentions would be to expel him from the PLP altogether.

  23. Chris Famous says:

    So I thought the Minister of Finance said we had “turned the corner?”

    Retail Sales Decrease 2.3% In March 2014

    May 8, 2014 | 0 Comments

    Retail sales in March 2014 fell 2.3% or $1.9 million below the $84.5 million recorded in March 2013, and after adjusting for inflation, the volume of retail sales decreased by 4.1%.

    Consumer demand weakened in all retail sectors, with sales of building materials registering the largest decline of 19.2%. In contrast, motor vehicle stores registered a 33.3% increase in sales.

    Residents returning to the island declared overseas purchases valued at $3.5 million during March 2014. This contributed to a combined local and overseas spending total of $86.1 million.

    After adjusting for the annual retail sales rate of inflation, measured at 1.9% in March, the volume of retail sales decreased by 4.1%. There were 26 shopping days during the month, one more than in March 2013

  24. Lauren Bell says:

    Well…..Anyone see the March Retail Sales Index??

    So much for the RSI being the leading economic indicator showing that the economy is turning around, eh?

    “Consumer demand weakened in all retail sectors”

    Retail Sales Decrease 2.3% In March 2014

    Retail sales in March 2014 fell 2.3% or $1.9 million below the $84.5 million recorded in March 2013, and after adjusting for inflation, the volume of retail sales decreased by 4.1%.

    Consumer demand weakened in all retail sectors, with sales of building materials registering the largest decline of 19.2%. In contrast, motor vehicle stores registered a 33.3% increase in sales.

    As Mr. Famous said in his piece, it is important to understand what these indicators can tell us and what they can’t

    KNOWLEDGE IS POWER