The economics of Christmas in Bermuda
The act of Christmas holiday shopping conjures up highly amusing and sometimes outrageous scenarios on global social media.
For example there are images of individuals frantically besting (or beating up) each other for the most in-demand wishlist items, the long lines, including those who camp out all night for the coveted at-dawn first places in the door to get the popular bargains, and bored individuals gathering up expensive tchotchke trinkets (gewgaws as old-timers were want to say) that they neither need or want but purchase as it passes the time.
On YouTube you can view such things, and see the outfits individuals wear when shopping — which are themselves a holiday fashion scene event.
However, we aren’t going there today.
Shopping is seen by some as a frivolous, time-wasting, overblown, all emotionally consuming pursuit, accompanied by refrains such as: “I have better things to do than shop.”
Of course these people also shop, they just don’t consider it shopping. There has even been anti-commercialisation and anti-shopping movements, such as “Buy Nothing Day” that originated decades ago in Canada before spreading across the world. The BND motto is “the more you consume, the less you live.” The argument for no shopping is that savings are saved, quality not quantity of purchases remains intact, holiday workers are not overworked and families can celebrate, not consume.
I disagree with that argument.
We are always shopping and consuming — we just don’t realise it. Consider the food we buy, utilities, rent, mortgages, personal care, clothing, shoes, transportation, and communication. Our challenge is to be good consumers by shopping carefully for all products and services so savings are made. Modern consumers are very savvy and are more than aware of quality more than quantity. Besides quality is in the eye of the consumer; families love to celebrate with their personal choices, and it is a free country after all. However, if shopping holidays sales decrease then the opportunities for additional jobs also decrease. How can BND a good thing?
Shopping is so much more than all these opinions. It is consumption of goods and services. It is consumerism — a vital, underlying, necessary component of trade and industry.
Consumerism is getting what you want and need, while giving someone else what they want or need. Increased consumerism by more people, or more shopping by the same number of people, is the very soul of an economy, generating demand for products and services as well as accelerating growth in wages, more jobs, realised profits and better lifestyles.
Increases and decreases of consumerism is part and parcel of the business cycle, our economic state, and indirectly is a consistent contributor to the operations of government.
If one considers a state where no consumerism and no trade takes place, you have an economy stagnating, industry declining across the board, gross domestic product dropping, lifestyles eroding, redundancies increasing, and a populace leaving for more promising horizons
And the last point reduces consumer numbers even more leading to a downward trend that in worst case can result in a country becoming a failed state.
At this time of year, consumerism is at its height during the so-called Black Friday events. Black Friday became a business phrase to describe retailers operating at the redline spectrum (loss territory) until the last month of the year, when the total annual sales, hopefully, will enter profit territory.
According to Statista.com, Christmas is typically the largest economic stimulus for many nations around the world as sales increase dramatically in almost all retail areas. Holiday sales can represent more than 25 per cent of a retail business’s success for the year. It literally is make or break time for many small business owners.
Christmas shopping is an incredibly important event for all retailers.
We can track Christmas retail sales with the help of the Bermuda Government’s monthly Retail Sales Index, with tracking back to 2014 available on the government website. Tracking total retail sales for December during the past three years, we see that in 2014 on-island spending was $106.6 million, and overseas spending was $7.5 million.
The figures for 2015 were $110 million and $6.8 million respectively, and for 2016 were $108 million and $6.5 million.
While the totals for 2017 are as yet undetermined, there is optimism and hope for a strong finish. Bermuda’s Black Friday has passed and by media accounts, retailers were pleased with the results.
Hundreds of Bermuda retail businesses are owned by Bermudians. Our friends and relatives are employed by local businesses. Our local employers pay our payroll taxes (to our government also owned by us), health insurance, both old age and Bermuda National Pension contributions, and more.
These individuals and their families are part and parcel of our community, they are our neighbours, friends, relatives, and business associates.
So, should you shop? Yes.
Should you use common-sense shopping with a budget? Yes.
Should you support your local retail community. Absolutely, yes. Every single chance you can.
And here is one more thing to think about. Bermuda for Bermudians is a constant refrain. If you firmly believe in that mantra but you are spending and sending your dollars elsewhere to benefit the economies of other countries, then are you truly supporting Bermuda for Bermudians?
Bermuda Government Retail Sales Index: https://www.gov.bm/retail-sales-index-rsi
Disclosure: I have no connection, and I am not employed by, or receive any gratuity for promoting Bermuda retail businesses.
Martha Harris Myron CPA CFP JSM: Masters of Law — international tax and financial services. Pondstraddler Life, financial perspectives for Bermuda islanders with multinational families and international connections on the Great Atlantic Pond. Contact: email@example.com