Retailers took a severe blow from the economic downturn as their sales declined by 5.6 percent in February — or 11 percent after inflation is taken into account.

The March figures are likely to be even worse and the sector is certain to shed more jobs over the coming months, according to Kristi Grayston, who chairs the Bermuda Chamber of Commerce's Retail Division.

Retail Sales Index figures released yesterday showed gross turnover measured $76.9 million in February — down $4.6 million on last year. "I suspect the numbers will be even worse for March," Ms Grayston said.

"I think it's largely a confidence issue. For some people, nothing has changed, but they feel they should be tightening their belts. "People have to feel confident that their jobs are safe and they don't have that confidence right now."

The retail sector would inevitably shed more jobs as companies struggled to survive, Ms Grayston said. "I think more people will lose their jobs," she said. "I don't think we will see big tourist numbers this year."

Ms Grayston said retailers were traditionally major employers of students in the summer and this job market would likely be impacted. She urged consumers who needed to buy anything to buy it locally, if possible, to support the local economy.

"If we're selling less, then we're also importing less and that hurts Government revenues too," Ms Grayston said.

She said Chamber members were doing their best to stock good products and attract buyers, and added the entrepreneurial spirit was alive and well, with some even seeing opportunities amid the gloom.

Government had appreciated that retailers were hurting and help in February's Budget statement was welcomed. The biggest extra thing the Government could do to help would be to cut payroll tax, she added. "That can make the difference between someone being hired and not," Ms Grayston added.

Among the retail sectors, only food stores achieved growth, registering an 8.3 percent gain in sales, which was entirely down to an 8.4 percent increase in food prices since last year. Apparel stores were particularly badly hit, with sales down 21.2 percent compared to February 2008, and following on from a 15-percent decline in January.

The motor vehicles sector saw its weakest sales month since May last year, with gross turnover down 19.7 percent. Lower stock levels combined with softening consumer demand to drive the decline. Service station sales fell 16.3 percent, partly influenced by a 4.4 percent fall in the price of fuel. And building material stores' sales fell for a fifth consecutive month, tumbling 11.1 percent, an indication of declining levels of construction activity.

Overseas spending fell 4.7 percent to around $4.1 million, compared to $4.3 million in February 2008.