sales to fall for the first time this year.

But Finance Minister the Hon. David Saul, calling the 2.2 percent drop in shop sales during April "just a little hiccough'', was not worried.

He believed retail sales would start picking up this month with an anticipated upturn in hotel visitors.

The new head of the Chamber of Commerce retail division, Ms Nancy Gosling, said the drop showed how vital visitors who stay at hotels were to the economy.

The April figures, released yesterday by the Statistics Department, also showed Bermudians continued to return to the Island from abroad laden with goods.

A sharp 18.9 percent rise in overseas spending on clothes, shoes, electronics and other goods worth a $2.14 million was recorded in April.

Dr. Saul believed the year-over-year increase was due to more honesty on the part of residents due to the new Customs duty system which slaps a 22-percent across-the-board tax on overseas goods.

"More people are declaring their purchase because they don't have to worry, `now what rate of duty will I be charged for this item','' he said.

But Ms Gosling, president of liquor merchants Gosling Brothers, was less sure.

Much more needed to be done to entice Bermudians to shop locally. "The Harbour Nights and Christmas shopping promotions do a lot to increase local spending. But we need to do more the rest of the time.

"You can't just say `shop in Bermuda because it will eventually affect you','' she said. "The retail industry has to do a lot more to promote what we have and let people know that shopping in Bermuda is not necessarily more expensive.'' As for the decline in retail sales, Mrs. Gosling said spending in local shops fluctuated directly in relation to tourism figures.

And the drop showed Bermuda retailers' best customers were visitors arriving by air as opposed to cruise ship. The cruise season started in April with liners arriving at near full capacity.

"When air arrivals drop, so do retail sales,'' Mrs. Gosling said.

Dr. Saul agreed, saying the 2.1 percent decline (after adjusting for inflation) in the volume of retail sales reflected the year-over-year drop in air arrivals in April.

"I believe we'll see retail sales start to pick up in the next quarter along with air arrivals,'' he said. "There is a lot of positive feeling right now.'' The Statistics Department said other contributing factors to the fall were a heavy drop in car and transport sales and the fact Easter -- a heavy shopping period -- fell in March this year instead of April.