Retail sector hits back at minister’s claim stores not up to scratch
The retail sector hit back last night at a government minister’s claim that they failed to provide good value.
The Chamber of Commerce also questioned why the Government had gone into partnership with a US-based firm to ship foreign-bought goods to the island – and insisted the move would hurt Bermudian importers and retailers.
One island-based importer said the Government’s decision was “disheartening”.
He also questioned why the contract had not been put out to tender so Bermudian firms could have competed.
They were speaking after Wayne Furbert, the Cabinet Office minister, claimed last Friday that online shopping at overseas stores was better value for money and offered a wider choice.
Mr Furbert defended the Government’s decision to back a link-up between the Bermuda Post Office and a US-based company to bring in goods bought overseas.
He admitted that the Government had failed to approach island-based importers before it sealed a deal with US-based MyUS.
Mr Furbert added that shopping patterns had changed and the bulk of Bermudians made significant numbers of purchases online.
The Chamber of Commerce said Mr Furbert’s remarks were “disappointing”.
A spokeswoman added: “Minister Wayne Furbert seems to have taken the ‘if you can’t beat them, join them’ attitude with his ‘every Bermudian is doing it’ comment.
“However, in doing this, Minister Wayne Furbert and his colleagues become part of the problem in a struggling Bermudian economy.
“Instead of using their powers to even the tax playing field between local retailers and those who use courier companies, they choose not to.”
She said: “Instead of incentivising and using their ability to change the outdated upfront duty tax structure that makes it virtually impossible for retailers to be competitive, they instead choose to continue using retailers as a primary revenue raiser.
“Instead of finding ways to reduce taxes and red tape so that local business is in a better position to compete, they jump on the courier service bandwagon under the guise of modernising and efficiency, but really what they are doing is taking a piece of the online pie.”
The spokeswoman said it was not the Government’s role to take tax dollars from the private sector then use the cash to compete against it.
She said: “The Government’s job is to provide a fertile, competitive, and productive environment for businesses to operate in.
“If politicians feel the retail environment should be improved, it is their job to liaise with those operating in retail to fix those taxes, rules or regulations that make the environment uncompetitive.”
She added: “This would lead to a much more powerful social and economic impact on Bermuda, which as we all know is very much needed.”
The spokeswoman admitted that times had changed and online shopping had seen massive growth, which had hit traditional stores around the world.
But she said: “In a small economy such as Bermuda, the effects of this are even greater.
“The real benefit of shopping local is that it is convenient and these businesses are run by Bermudians who employ Bermudians, who are patronised for the most part by Bermudians, who put Bermudian dollars back into the Bermudian economy.”
She added: “Mr Furbert and his colleagues might want to refocus on the 3,500-plus people who work in the retail industry – their future unemployment will be a heavy cost that they will have to bear.”
The spokeswoman said Bermuda still had “a vibrant retail community”, which carried a wide range, gave good customer service and a quality online experience.
Kenny Thomson, the president of importers Mailboxes Unlimited, also questioned the decision to team up with MyUS.
Mr Thomson said: “It is disheartening that a request for proposal wasn’t issued so that Bermudian businesses could compete for the contract.
“Mailboxes operates a fulfilment centre which could have provided these services for the Bermuda Post Office to the benefit of both entities.”
Mr Thomson added that his firm had a warehouse in New Jersey he administered along with his other Bermuda-based management team.
But he said: “On the contrary, MyUS is a for-profit, non-Bermudian enterprise which will add a steep mark-up for the services it provides to the BPO … meaning more cash leaving Bermuda’s economy with the Bermuda Government’s signature on the cheque.”
Kevin Smith, the managing director of courier firm IBC said he would welcome the chance to work the Government – but that he wanted to know what benefit would the public get from a private sector partner.
Mr Smith said: “Government should not be competing with private business right now.
“Local companies have had a tough last 18 months and I fear this may be the final bullet for some.
He asked: “How many local businesses will suffer and how many jobs will be lost resulting from this initiative?”