beleaguered retail industry, shop owners and observers say.

Their words of warning came yesterday with Finance Ministry figures showing recession-battered stores clocking up their 19th straight month of declines in sales volumes and values.

"We haven't seen anything yet,'' Mr. Bobby Rego, the Chamber of Commerce sales division chairman, warned.

"I have no hesitation saying this winter is going to be a lot worse than last.'' One Government official said industry expectations for the autumn months were for reduced work weeks at best, and lay-offs and redundancies at worst.

"There will be more lay-offs this fall than last winter,'' he said.

Mr. Rego agreed, noting the retail industry has normally done well enough in busy summer months to ride out slow winters. But this summer, he said, was the third in a row with sales well down.

"What I'm seeing now is people just surviving the summer,'' he said. "This winter will be crunch time. Shop owners will look at their biggest expense, which is staff, and start reducing work weeks. Lay-offs or redundancies will follow.'' Retailer Mr. Tommy Dickinson of Astwood-Dickinson did not, however, agree with the lay-off prediction.

"I don't know about earlier lay-offs than last year,'' he said. "Most people through terminations and attrition have really skimmed back their employees already.'' One of the disturbing trends in yesterday's Finance Ministry figures is the continuing trend in overseas purchases by local residents.

Declared purchases abroad increased 5.1 percent to $1.45 million in July. In June, the increase was 15.8 percent, or $1.61 million.

To counter the trend, the Chamber will resurrect and expand the Buy Bermuda campaign it started last winter. Mr. Rego said the Chamber would move beyond print advertising to radio and television as well.

"The message will be that buying abroad could cost jobs for Bermudians,'' he said.

The campaign is to begin this autumn.

The Government statistical report said the total value of retail sales in July fell 6.2 percent compared to the same month last year. Volume was down 8.3 percent.

"All sectors of the retail sector experienced a decline in gross sales with the exception of the motor vehicle and service station sector,'' the report said.

Finance Ministry figures show that the declines cannot wholly be attributed to the fall-off on tourism arrivals.

Average per capita spending by regular visitors during the second quarter of the year was $1,107. In the period last year, spending was $1,116. The difference represents a 0.1 percent decline.

One Government officer, who spoke on condition of anonymity, said a critical factor in the decline was the loss of up to 3,000 work permit holders and their families.

"These people represent a lot of spending power,'' he said.

In addition, their departures from the Island have resulted in many home owners losing rental incomes.

"There is just a lot less money around,'' he said. "And, consequently, there has been a significant decline in household expenditure.'' The officer also noted that the high number of unemployed people and those who have had no pay raise in recent years account for poor sales.