yesterday from the latest sales statistics.

Mr. Bobby Rego, vice-president of the Chamber of Commerce, said increased visitors this summer did not result in increased spending.

The retail index showed sales in August slipped below the same month last year, once inflation was taken into account.

"Things are very, very tight,'' Mr. Rego told The Royal Gazette . "Many, many shops are having problems; there are no two ways about it.

"Because of their prudent business practises in the past, they've had some reserves to draw on, but you get to the point where those reserves run out.'' Mr. Rego said he did not expect any major retailers to go out of business soon, but there could be further staff cutbacks after Christmas.

For retailers, August was "the last bite at the cherry'' before Christmas, because sales in September and October were traditionally soft.

When the latest balance of payments figures were released on Thursday, Bermuda Monetary Authority chairman Mr. Mansfield (Jim) Brock said he believed the recession was over.

But faced with the retail sales index a day later, Mr. Rego said: "These figures really aren't anything to be enthused about.'' The August, 1993, index showed retail sales of $41 million and a two percent increase over August of 1992. But when the 2.4 percent inflation rate was considered, sales actually slipped 0.4 percent, the Government Statistical Department reported.

In the general retail sector, sales were up 5.3 percent over August of 1992, but local demand eased for clothing, electronics, and some other consumer goods.

"At least we're able to hold our own, but what's catching up with us is not only inflation, but the cost of doing business,'' Mr. Rego said.

While some retailers were moving larger volumes of goods, sales and discounts were cutting deeper into profits, he said.

Stores that sold quality china and fine clothing were particularly hard hit, he said. "This reflects the US economy at the moment,'' where the recovery appeared stalled and consumers lacked confidence, he said.

But Mr. Rego was disturbed to see that overseas purchases declared by residents jumped 5.2 percent in August over last year, after percentage increases of 17.2, 8.7, and 9.0 in May, June, and July respectively.

There was an obvious perception that overseas buying was less costly. But if Bermudians considered the cost of their trips, they would not be saving as much as they thought, he said.

And local retailers, who on average faced duties of 17 percent and transportation costs, were placed in a "Catch-22,'' Mr. Rego said. "If shops can't generate business, they go out of business, or they cut back on their inventory.'' Only Christmas gave Mr. Rego any cause for optimism. "With our tourist arrivals being up, and Bermudians being hired more on a full-time basis over the summer, it may have some effect on Christmas buying by locals,'' he said.

"Bermudians seem to find money at Christmas time.'' Sales were down 7.7 percent in the motor vehicle and service station sector, while food store sales edged up 0.8 percent, and liquor store revenues rose 1.7 percent.

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