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Booze and boats selling well in tough times

Booze and boats: Both generating increasing business in Bermuda, despite the economic malaise

Booze and boats are still selling well in Bermuda despite the Island’s struggling economy.According to Government’s monthly Retail Sales Index, both industries, along with food stores, drove retail sales 0.5 percent higher in August along with Cup Match holiday spending.However, after adjusting for the annual retail sales rate of inflation, measured at three percent in August, the volume of retail sales actually fell by 2.5 percent.Since January 2012, liquor sales have increased over 2011 in every month aside from April. The decrease during that month was attributed to one less discount shopping day compared to the year before. In August, alcohol sales jumped 19.6 percent, the largest increase this year.Is Bermuda’s penchant for pinot tied to tough economic times or are people drinking as much as they always have? Either way, Bermuda’s situation is not unique. Alcohol sales in the US have continued to climb unabated throughout the recession starting in 2008.“I wouldn’t say it’s recession proof,” Esther Kwon, an alcohol industry analyst for Standard & Poor’s said in an interview with CNN Money. “People will buy less and they will move to different venues, meaning moving to home instead of a bar. But people will continue to drink, regardless.”The boating and marine supplies industry also recorded increases every month except February and April, however, in the good months, sales were up by double digits. In August, the industry recorded an 21.6 percent increase, in June — an 80 percent increase, in March — up 16.7 percent.“Our sales are up on the year,” said Alan Brooks, general manager at PW Marine, the largest marine business in Bermuda. “We’re actually quite buoyant.” Mr Brooks added his company, which sells and services boats as well as sells marine supplies, has been prudent on how much inventory they keep in stock and trying to cut back on their electricity usage to make sure they are keeping expenses at a minimum.While many businesses have cited the lack of expatriate shoppers for their decline in sales, Mr Brooks said that boat owners in Bermuda — whether they are expatriate or local — know they have to keep up with their vessels.“Lots of people have boats and they know that if you skip an annual service one year, you’ll have twice the amount of work needed to be done the next,” he said, adding that customers are still getting the essentials done and not the expensive extras.The food industry has also done well so far this year, recently reporting a 9.4 percent increase in gross receipts compared to August 2011. Grocers recorded an increase in sales every month this year, except April and May.Other industries in the local market, however, haven’t fared as well. Motor vehicle retail industry has continued its free fall in sales — registering a 17.5 percent year-over-year drop in sales receipts in August. In July, the industry had reported its first increase in sales since March 2010, with a 64.2 percent jump attributed to new inventory leading to a surge in unit sales of all vehicle types.Sales of building materials also fell 12.7 percent during August 2012. The decrease in sales was due to fewer construction contract projects.Sales revenue for apparel stores declined 3.3 percent during August 2012. Clothing stores are having a tough year, only seeing a marginal increase in sales over 2011 in July and March. Service station sales decreased 2.2 percent during August.The ‘catch-all’ sector experienced a 4.8 percent drop in sales receipts during August. Sales receipts for big-ticket items such as furniture, appliances and electronics also fell 12.2 percent, while sales from tourist-related stores fell 13.6 percent year-over year.In contrast, sales of pharmaceutical products increased by 7.2 percent.Residents returning to the Island declared overseas purchases of goods valued at $7.1 million during August 2012, a 5.3 percent drop or $400,000 less than the $7.5 million declared in August 2011.Combined local and overseas spending totaled $91.5 million.

Boost: Grocery stores benefited from a spike in food sales for the Cup Match holiday