The Town of St. George's was quiet this week but business owners are holding out hope that the Christmas season will see sales improve.

A salesperson at Peniston Brown said business was picking up with customers already beginning their Christmas shopping.

A Boyle's employee said the shoe business was slow, but the store was hoping for an increase in business with the holiday season.

At Burrows Lightbourn, one of five shops that sell liquor in St. George's, a staffer lamented the lack of business and said: "It is always slow, once the cruise ship season is over."

Victor Mello, of Mello's Grocery on Water Street, painted a glum economic picture. "We are not doing good," he said. "Look at the streets, they are empty. But, it is worse this year."

Mr. Mello, who has been running the grocery for 58 years and claims never to have taken a vacation, said he is going to try and keep the business going.

One complaint of the veteran St. George businessman was a chain across Water Street that shuts it off to motor traffic.

"From 10 a.m. to 4 p.m. they won't let cars through. In the summer I can understand, but they should open up the road in the off-season. Now everyone gets groceries from the grocery store as they can drive right up to the door."

Mr. Mello runs the shop six days a week from 6 a.m. to 5 p.m., and said he cannot afford to hire outside help - although his son helps him in the operation.

Next door at Kippie's Place, owner Kenneth Bascome also conceded that business is slower than usual. And he said that typically he depends on business from visiting yachts, at this time of year. But, Mr. Bascome said the number of yachts coming in has dropped. He said fewer boats are swinging by Bermuda on their way south as the Caribbean is also suffering a downturn.

Of what could save the Town's fate, Mr. Bascome said: "Something needs to be done with that property on the hill," referring to the long-closed Club Med property.

Mr. Bascome has put in Internet terminals to try and attract more customers, and he echoed Mr. Mello's opinion that Water Street should be opened to traffic, during the "off-season".

Of his fellow business owners, Mr. Bascome said the Town has suffered a number of blows with Club Med closing, the US Base closing, and Marriott's Castle Harbour Resort closing, but he said: "Everybody is basically hanging on, but it will be a very trying winter."

Signs at The White Horse Tavern, read: "Closed until further notice." It is understood that owner Chris West, who ran the White Horse over the last decade, decided to close the restaurant's doors for economic reasons.

This leaves only one restaurant on King's Square: Freddie's Restaurant and Pub. And owner Allan Powell told The Royal Gazette that although business has been good, he has also considered closing because of problems with rowdy youths.

Another Town eatery also reported having a strong customer base, with staff at San Giorgio's Restaurant said it is doing really well and that there has been no real drop in sales.

Above the now-defunct White Horse is the Carole Holding Gallery.

President of Carole Holding Limited Joe Tee said: "Sales are off this year". Mr. Tee said he was not referring to sales at the St. George's store, but at its three galleries, the other two being located in Hamilton and Dockyard.

Mr. Tee said sales showed a decline not only after the last cruise ships, but "before, during and after the tourist season".

Of the sales drop, Mr. Tee said: "It is, no doubt, from declining hotel occupancies."

But, remaining upbeat, Mr. Tee said the company hoped for better Christmas sales this year, over last year. To that end, the galleries have stocked up on what Mr. Tee described as unique designs that would appeal to a local market.

Mr. Tee said the galleries continue to carry unique designs and have printed their own Christmas card this year.

Bailey's Bay businesses indicated that business was fairly solid.

Tony Esposito, at Tony's Fine Foods, said he was concerned after September 11 but so far, he said, his sales were up over last Fall.

The grocer said although a percentage of his business came from Grotto Bay guests, he also had increasing local clientele. "Everyone has got to eat," he said.

Jay Correia, owner and manager of the Swizzle Inn said the restaurant is well-positioned to weather the economic downturn. He said the Swizzle Inn has long had a reputation as a must-see for visitors. But, Mr. Correia added that he is not resting on the restaurant's hot spot reputation alone: "Through the years I have worked very hard to attract locals. In the restaurant business and with the way tourism has been going for the last 20 years you have to have local trade," he said.

Mr. Correia also said Bailey's Bay was a good place to be, as visitors came to see the caves anf the Bermuda Perfumery.

Mr. Correia said the restaurant's sales had shown an annual increase, and sales were up this year, over last year. He added that he expected a drop in the year's last quarter. But, he said: "The expectations of complete fall-out has not happened. Although the worse is still to come January and February will be a difficult time to get through," he said.

"I am glad to be on this side of the bridge as I know how hard it is to get locals into St. George's," he said.

Mr. Correia, who is also head of the restaurant division of the Chamber of Commerce, said indicators were that the restaurant industry was holding up in the face of economic trials. "The restaurants try to be creative and indications are that Bermuda is still supporting the restaurants. I know people who say they go out to eat at least once a week, because they don't feel like cooking. But it is also because they feel it is a good idea to support local restaurants."