Population fall is retailers’ major concern
Bermuda's declining population, rather than residents' penchant for shopping online, is behind the decline of the island's retail sector, says a leading retail boss.
Paula Clarke, chief executive officer of Gibbons Company and former chairwoman of the retail division of the Bermuda Chamber of Commerce, said online sales make up 14 per cent of total retail sales in Bermuda. The corresponding figure in the United States is 15 per cent.
She said: “The biggest concern for retailers is the population of Bermuda. The economic outlook for retail is based on population. If more people were living here, spending their money in Bermuda, the retail outlook would be stronger.”
Ms Clarke said Gibbons' same store sales in December were stronger compared to 2018 but, taken together with November sales to include the impact of Black Friday takings, sales were flat year-on-year.
She said the outlook for retail in 2020 “is not very bright”.
That projection is in line with retail sales figures reported in 2019. In August, the last month for which figures have been reported by Government, sales fell by 7.6 per cent year-over-year when adjusted for inflation. That marked the 16th month in 18 that sales had declined.
The pre-Christmas holiday shopping season, which now begins with Black Friday, is an important period for retailers, but representatives of longstanding retail businesses in Bermuda spoken to by The Royal Gazette said sales during that time were mostly flat or declined from past years.
Somers Cooper, managing director of AS Cooper & Sons Ltd, said pre-Christmas sales were down on previous years, but “met our expectations”.
He said a rainy Christmas Eve contributed to the drop as the final day of pre-Christmas shopping “wasn't as strong as it usually is”.
Mr Cooper added: “I am reluctant to share those numbers publicly but, like everyone else, we have seen a downward trend for quite some time.
“Our business is a lot different than it was a year ago. We projected out the business a bit differently and we ended up where we thought we would.”
On September 1, the deal closed for Brown and Co to take over the lease, inventory and staff of AS Cooper's 7,500 square foot, ground floor operation at 59 Front Street.
Mr Cooper said: “Also, a year ago, our second floor was operating as well.”
Of the retail outlook for 2020, Mr Cooper said: “From our perspective, things look fairly flat. We see some opportunities in the tourist-oriented parts of the business, and we will be looking at them for growth opportunities.”
Kristen Carreiro, owner of ModBlu Boutique on Reid Street, said the holiday shopping season unfolded as she expected it would.
“It was good, there were definitely more people shopping during the Christmas season, but it was definitely not as busy as previous years,” she said. “But it was still the boost that everyone needs.”
She added: “The saving grace this year was that retailers have seen the downturn in retail coming. It's in the newspaper, month after month, that sales are down, so it's all about adaptability.
“I anticipated that it would not be as busy as previous years, so I made sure that our inventory levels reflected that.”
Ms Carreiro, who said holiday season takings are “at least a quarter of annual sales”, said 2020 is shaping up to present similar challenges to those experienced this year.
“There have been no changes by Government, whether that is immigration reform or changes to taxes, so I don't think in 2020 there will be more traffic, so it will be up to retail to adapt to that,” she said. “We know fewer people will be coming in, so we need to focus on the people who are coming in.
“It is all a ripple effect, there will be a lot of empty buildings, so it boils down to landlords to be open-minded. If they have got a good tenant, they should keep overheads okay to keep them.”
Andrea Fubler owns Salt+Cedar, an all-natural beauty and lifestyle store in the Emporium Building on Front Street. She began the business online in November, 2016 before opening a shop in May.
She said: “My Christmas shopping period was great. It is my first year with a bricks and mortar shop, so I don't have a baseline to compare it against other seasons, but for my first year with a store, I was happy with the results.”