Chamber laments report’s view of retail
Customs duty breaks and other suggested lifelines for the island’s struggling retail sector seem to “fall on deaf ears”, a retail head said yesterday.
Lorraine Shailer, cochairwoman of the Bermuda Chamber of Commerce’s retail division, said the Ministry of Finance appeared “unwilling to budge” when it came to offering relief.
Ms Shailer, general manager of the local branch of Marks & Spencer, said: “The feedback I get is, they feel what’s happening in retail is not unique to Bermuda; that our model, within Bermuda, needs to adjust to survive, and retailers aren’t doing enough.
“I don’t think many of us don’t believe we have to adjust to survive. But, when you’re in a massive bind, these changes are not easy to arrive at.”
Ms Shailer listed suggestions ranging from reviewing the amounts of Customs duties to streamlining the procedure for retailers to delay paying duties.
She said the duty relief currently allowed for store refurbishment could be expanded to cover equipment for online business or mobile cash points, to improve shoppers’ experience.
She added: “A lot of retailers feel hurt that the Government does not think they’re trying — that’s the impression we get.”
According to the Government’s pre-budget Report, released on Tuesday, retail and wholesaling took the “largest decline in value” in 2018.
The report also noted that the island’s modest economic gains of 2019 were offset by the struggling retail sector.
Retail sales continued their slump into the first nine months of last year, dropping by 2 per cent or $17.5 million.
The latest government statistics have also showed a fall in sales of 7.6 per cent for retail last August.
It marked the 16th month in 18 that sales had declined.
But Curtis Dickinson, the Minister of Finance, said the Government “currently provides some tax relief to retailers”, adding: “One thing I try not to do is have kneejerk reactions to a problem. The reality is, retail here is difficult. The retail model is changing.
“The way people shop for goods and services has changed fundamentally because of the internet and the Amazon phenomenon.”
Mr Dickinson added: “Retailers here are going to need to adapt.
“Customers are buying things differently; they can shop through couriers and from the US. People are smarter and have much, much more choice.
“To some degree, living on an island our size, it will always be a challenge for the retail sector. I don’t think the challenge is insurmountable.”
On Customs relief, Mr Dickinson said: “I stay very careful of committing to anything too quickly without studying its eventual impact.
“The reality is, I have multiple pressure points that I have to address.
“There is a persistent cry for me to reduce government spending, and persistent commentary around getting rid of the deficit, reducing the debt.
“I am working to figure out how to do all of those things, without doing anything that will make others a whole lot worse.”
The minister said he had faced pressure to raise taxes on couriers’ rates, which would have amounted to “hurting one sector to benefit another”.
The pre-budget report also came under fire from the Opposition, with shadow finance minister Nick Kempe critical of the omission of immigration reform and cutting government expenditure.
Mr Kempe criticised the Progressive Labour Party government’s tax policies, which he said were “nickel and diming Bermudians in order to maintain excessive levels of public spending”.
Mr Kempe said cutting spending would also “decrease the need to raise taxes”, adding: “I see no vision to stimulate the economy.”
Mr Dickinson responded: “I would say the Opposition, when they were in government, cut spending, but didn’t cut as much as they would have liked.
“At some point, you start to impact quality and the delivery of services.
“I am not going to make broad pronouncements about cuts in the civil service willy-nilly — at the end of the day these are people with families and with job commitments.
“All that ends up happening is people move from the salary line to the financial assistance line.”
He added: “I’m not trying to court social unrest because people are without work.
“My challenge to senator Kempe is, if you have specific ideas around how we can reduce government expenditure, let me know what they are so we can give them proper consideration.”
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