The drop off in retail sales may be slowing after Government statistics released on Friday showed the Retail Sales Index dipped only marginally during the month of February.

The index fell by 0.2 percent during the month, the smallest decline since November 2001. The index has not shown positive movement since March 2001, when it grew 0.1 percent. Last February the index fell by 2.7 percent.

The average monthly percentage change in the past 12 months has been a negative 2.3 percent.

Overseas purchases declared by returning residents increased by two percent, with reported spending was $2.09 million, the first increase in four months and the highest increase since July last year.

Not taking inflation into account, which stood at 2.4 percent in February, the level of retail sales increased by 2.2 percent.

During the month, Bermudians and residents spent $34.9 million in the local economy, an average of $562.90 for every man woman and child (using estimates of population at 62,000).

The report said that all sectors of the index reported sales revenue above the levels reached in the previous year, apart from motor vehicle dealers, petrol stations and clothes and accessories stores.

Spending on hardware and building supplies showed the strongest increase in the index, up by 10.2 percent which was attributed to the continued growth in the construction industry.

Petrol sales in the service station sector dipped 14 percent below the amount a year earlier and the Statistics Department said that this was primarily due to the temporary closure of a major service station for renovations.

In the clothes and accessories sector, sales fell by 0.2 percent and the report said that over half of the stores in this sector reported sales revenue below that of a year ago.

The weak sales activity came from a combined effect of store closures, low stock of inventory and downsizing that happened during February, the RSI report added.

The motor vehicle sector also saw a 0.2 percent decline in sales. The report said that dealers reported mixed results due to varying changes in their current levels of stock and some models were discontinued.

Gross revenue for flows in the "all other store types" sector increased by 4.1 percent. The bulletin said that sales receipts for furniture and home furnishings continued to rise due to seasonal clearance sales held by some retailers.

Spending on pharmaceutical products and personal care supplies also increased.

In contrast, the report said that tourist-related sales and domestic spending on items such as boats, electronic equipment and household appliances all contracted.

Liquor merchants during February, when there were 24 shopping days, the same as in 2001, reported a 6.1 percent increase in sales.

Gross receipts on food stored increased 2.7 percent during February, the report added.