The current state of the economy and future business is a big worry for shopkeepers and retailers alike across Bermuda.

Many traders in Hamilton and St. George's voiced their concerns about the slowdown in trade in recent weeks and months, as borne out by the latest retail statistics released by Government.

But some are quietly confident about pulling through their present plight, while others can only see the situation getting worse.

In June, retail sales growth slowed to 1.2 percent, compared to a three-percent rise in the previous year, as consumers began to feel the pinch from spiralling fuel prices and food costs, with consumer spending estimated at $99.6 million, according to the latest figures in the Retail Price Index.

After adjusting for the annual retail sales rate of inflation, measured at 5.4 percent in June, sales volume fell by four percent, reflecting the fourth month of drops activity for the first half of 2008.

Gaylynne Romeo, owner of Foreign Cargo, in Hamilton, said that July and August were notoriously quiet months when residents go away on holiday, but she was clearly seeing a difference in sales compared to previous years.

"It is at this time on the year typically things seem to slow anyhow," she said. "But we do feel a difference this year — it could be because of what is going on in America with the economic crisis.

"Christmas will be interesting to see how the response is going to be in Bermuda."

She said that there were a number of factors which might be having an impact on business, from new retail stores opening up providing more competition to shoppers watching what they are spending and looking to get more value for their money.

"I think perhaps because more retail stores are opening there is more competition. The economic crisis is slowing everyone down and they are watching what they are spending," she said.

"They are perhaps a little bit more cost conscious than they used to be and are looking for quality things that are going to last. As a retailer and shop owner we keep our heads high and have to get through this — we work with other stores and retailers and if we do not have a product recommend where they can get it and vice-versa with other traders."

Isabelle Ramsay-Brackstone, owner of Bermuda Perfumery, in St. George's, which has a retail, wholesale and Internet business, said trade was good at her store, but admitted she was fearful for what the future might hold.

"We are doing very well," she said. "About three years ago we completely revamped the product. It is very successful and sales are up from last year.

"I hope it stays like that and we are pinching ourselves, but that said we are extremely frightened with what is going on. We would like to expand the line and open up more shops across the Island.

"But I am really scared with what is going on worldwide, as well as locally with the lack of cruise ship customers."

Denise Trew, owner of the All About Eve Boutique and the newly-opened Top Hat Lady, both in St. George's, offered a glimmer of hope, saying that while many traders may be feeling the pinch right now, it was also an opportunity to take a step back and revamp their businesses.

"We definitely have seen that the economy is on a downturn and in addition to tourism it has not recovered sufficiently to generate the required cash flow," she said.

"Small businesses such as us are challenged every day by certain constraints, either through the lack of capital or the lack of patronage.

"We find creativity plays a large part in how we cope, so we have to learn to do more with less. We are not completely discouraged — it gives us a chance to refocus and revamp and that is the way we have to work our business."