Economic support of Christmas in Bermuda
This semi-annual article has been updated for this year.
Much is made of GDP numbers when talking about an economy. GDP stands for Gross Domestic Product, the monetary measure of the market value of all the final goods and services produced in a specific time period, often annually, in an economy.
What about consumerism? Produce is only one part of the equation. Who is buying these goods and services, and most importantly how much is being bought?
In my mind, GDP is almost irrelevant because if you do not have sufficient consumers who have the impetus to support and purchase these wonderful products and services, where are you as an economy?
Let’s think about Christmas shopping. It has conjured up highly amusing, sometimes outrageous scenarios of shoppers on global social media. We’ve seen much of that, but we aren’t going there today, however.
Consumer shopping is panned by some as a frivolous, time-wasting, overblown, an all emotionally charged pursuit. “I have better things to do than shop,” is a common statement.
Of course, these people shop, too; they just don’t consider it shopping.
We are always shopping and consuming — merely by living, we just don’t realise it: food, utilities, rent, mortgages, personal care, clothing, shoes, transportation, communication, entertainment.
Our challenge to be good consumers requires shopping carefully for all products and services so savings are made.
Modern consumers are very savvy and are aware of quality versus quantity. Families on any holiday occasion love to celebrate with their personal choices of products and services.
Shopping is so much more than our every day and special occasion purchases.
Shopping is consumerism — a vital, underlying, necessary component of trade and industry and economic growth.
Consumerism is getting what you want and need, while giving someone what they want/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 and production, realised profits, and better lifestyles.
Consumerism both increases and decreases and is part and parcel of the business cycle, our economic state, and indirectly a consistent contributor to the operations of government.
A country state where little to no consumerism or trade takes place is an economy in stagnation. Industry declines across the board, GDP drops, lifestyles erode, redundancies increase, populace leaves for more promising horizons — reducing consumer numbers even more, and on and on in a downward trend. In worst cases, such a country becomes a failed state, a situation that no one wants to experience, even though millions today still do.
At this time of year, consumerism is at its height with Christmas shopping an incredibly important event for retailers.
According to www.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’ success for the year. It literally is make or break time for many small business owners.”
Tracking Bermuda’s Christmas Retail Sales Results
The Bermuda Government Retail Sales Index is released every month, tracked back to 2006 and is a key economic indicator used to assess the current performance of sales activity in the local retail sector. The RSI:
• measures monthly and annual movements of retail sales;
• provides an estimated gross turnover of retail sales; and
• acts as a barometer of change in the level of demand (consumerism) for both the domestic and tourist markets.
Retail Sales Index methodology is structured into seven broad sectors:
• Food stores
• Liquor stores
• Motor vehicle dealers
• Service stations
• Building materials
• Apparel stores
• All other store types
Total retail stores across the seven sectors represent roughly 70 per cent of all retail activity on the island.
Tracking the last five December’s total retail sales by value, we see these spending totals:
2014 — $106.6 million locally and $7.5 million overseas.
2015 — $111 million locally and $6.8 million overseas.
2016 — $108.9 million locally and $6.5 million overseas.
2017 — $111.3 million locally and $7.3 million overseas.
2018 — $108 million locally and $7 million overseas and declared at airport.
Note: not all years appear to include purchases brought in by courier, via sea and post office. Further research is necessary as local reporting indicates that purchases online have increased.
Hundreds and possibly thousands of Bermuda retail and service businesses are owned by Bermudians and employ Bermuda islanders. These, and many other local businesses, contribute to our payroll taxes, health insurance, both Old Age and Bermuda National Pension contributions, corporate taxes, and more.
These business individuals and their families are part and parcel of our community. They are our neighbours, friends, relatives, business associates, and community supporters.
So, dear readers, before you click that “order” button for holiday gifts online I’d like to ask you to make a list of every person you know — in your family, relatives, friends, business peers, and anyone else — that are employed in retail and service organisations in Bermuda.
How many are there? Ten, 15, more?
Now think about the foot traffic that you might not make to their employers’ businesses because you shop overseas, online or other places. How will these businesses be impacted during this busy holiday season?
Bermuda for Bermudians has become a constant refrain. If we firmly believe in that mantra, but are spending (and sending) all our shopping dollars elsewhere to benefit the economies of other countries, then aren’t we being more than just a bit hypocritical?
So, should you shop? Yes.
Should you employ a common-sense, competitive shopping with a budget strategy? Yes.
Should you support your local retail community. Absolutely, yes. Whenever you can.
Disclosure. I have no connection, am not employed by, or receive any gratuity for promoting Bermuda businesses.
• Bermuda Government Retail Sales Index https://www.gov.bm/retail-sales-index-rsi
•Martha Harris Myron CPA CFP JSM: Masters of Law — international tax and financial services. Dual citizen: Bermudian/US. Pondstraddler Life, financial perspectives for Bermuda islanders and their globally mobile connections on the Great Atlantic Pond. Finance columnist to The Royal Gazette, Bermuda. All proceeds earned from this column go to The Reading Clinic. Contact: firstname.lastname@example.org
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