Sales increase hailed as sign of confidence
An upward trend in sales receipts for retailers sharpened further in June, and has been hailed as “a positive shift in consumer confidence”.
The retail sales index notched up an eleventh consecutive month of improvement, year-on-year, in June. It rose 7.1 per cent compared to the corresponding month in 2014.
Once adjusted for the retail sales rate of inflation, which was measured at 1.7 per cent, the volume of sales was up 5.3 per cent.
“The June retail results indicate a positive shift in consumer confidence. Retailers are preparing for the fall season and anticipate higher activity during the America’s Cup event in October,” said Paula Clarke, chief executive officer of Gibbons Company and chairwoman of the Bermuda Chamber of Commerce retail division.
By sector, sales of motor vehicles had the largest increase, up 36.7 per cent. Motor vehicle stores have seen double-digit improvements in sales, both in terms of value and volume, for eight of the past 12 months. However, it should be noted that the level of sales in June is still only 65 per cent of the level recorded in 2006, which is the base period reference point for the index.
Glen Smith, managing director of Auto Solutions, said the latest figures at the firm showed a massive 73 per cent increase in sales for July, year on year.
He added: “I think it’s a lot of things — there are a lot of cars which have come to the end of their useful life, so they are being replaced.
“We’ve also seen some new people moving to Bermuda, which could be either working for the offshore industries her or the America’s Cup.
“We’ve also seen the commercial division grow — there are businesses reinvesting and purchasing new vans and trucks.
“At the end of the day, I see it as there being more confidence in the market. People are having confidence in their businesses.
“We’re extremely excited and encouraged and it’s not just one auto dealer — we’re all growing.”
And Mr Smith said commercial vehicle buying had been helped along by increases in the building materials sector.
Building material stores had a good month with gross receipts up 12.6 per cent, marking the tenth consecutive month of improved results. The increase in sales has been linked to more residential projects being undertaken. The sector remains at only one-third of the sales level recorded in 2006.
Bermuda Motors general manager Michael Butler said sales had been consistently up every month this year and July’s figures promised to be better than June.
But he added that increased passenger vehicle sales was largely down to people replacing older cars.
He added: “There are a lot of vehicles on the road now which are more than ten years old. It’s older vehicles coming off the road rather than an increase in the number of vehicles on the road.
“There was a 60 per cent drop in sales after 2007 — really, all we are doing is playing catch up.”
Mr Butler said that Bermuda Motors had not seen a spike in commercial vehicle sales.
He added: “If the number of commercial vehicles was going up, which I don’t think they are, that would be a sign that business was picking up. From that, you could say maybe that the economy, once you see truck sales go up, is picking up.”
A high demand for sales items was one of the factors that helped lift apparel stores’ revenue 6.2 per cent by value and 8 per cent by volume.
Residents returning from overseas declared purchased goods valued at $4.3 million, which was the same as in June 2014.
The total value of sales for the month, both locally and overseas purchases, was $99 million. The retail sales index data was released by the Department of Statistics.