Chamber cautious as sales hit five-year high
Retail sales in Bermuda have recorded their biggest year-on-year jump since the start of the economic downturn in 2008, jumping to $107.7 million in December.
That represents a 6.3 per cent increase in the total retail sales index compared to December 2013. After inflation the increase was 5.2 per cent.
It is five years since Bermuda has recorded a month with a higher total of retail sales. In December 2009 the figure was $110.1 million.
There were improved figures in all other sectors, except for service stations.
Motor vehicle sales jumped the most, up 59.2 per cent.
The numbers have been cautiously welcomed by the Bermuda Chamber of Commerce.
The announcement in early December that the 2017 America’s Cup was coming to Bermuda is seen as one of the factors that lifted consumer confidence in the run-up to Christmas.
Factors that appear to have added extra lustre to the month’s retail sales index totals were extended sales, the delayed purchasing of items to repair hurricane damage and the addition of one extra shopping day in December.
“It is encouraging that some of the numbers are bumping up. But we are still hurting,” said Kristi Grayson, president of the Chamber of Commerce.
“The rise in building materials is still being credited to hurricane repairs two months after the storms.” Ms Grayson believes this may have been a result of people waiting until they received their Christmas bonuses to pay for storm repairs.
Apparel stores recorded a 3.9 per cent year-on-year increase for December. Ms Grayson pointed out that many retailers had extended sales and discounting during the month, so the increase was achieved “the hard way”.
An additional shopping day in December, compared to 2013, was an added help, particularly for food and liquor stores as there were also two additional discount shopping days during the month.
Despite the sizeable jump in motor vehicle sales, the total is still less than 60 per cent of what it was nine years ago.
Ms Grayson said: “We have to look at how far we have come down.”
Paula Clarke, the Chamber of Commerce’s retail division chief, said: “Consumer confidence was certainly buoyed by the news of the America’s Cup coming to Bermuda.
“In addition spending increased with payouts from insurance claims from the two hurricanes that occurred in October as homeowners and business’s completed repairs to properties.
“Vehicle sales have shown consistent growth throughout the year due to the increase of the average age of motor vehicles.”
Ms Clarke, who is also CEO of Gibbons Company, said: “There was a lot of promotional activity in the month of December, which negatively affects margins. The retail sector continues to be challenged by the shrinking population.”
Looking ahead to the coming year, Chamber president Ms Grayson said: “As entrepreneurs we are always hopeful. Retailers are being creative and we are going to see a lot of creative retailing with the America’s Cup coming.”
Returning residents declared overseas purchases of $7.5 million in December, bringing the combined total of on-Island and overseas spending to $115.2 million.