Government must move to nurture the declining retail business or else turn to another industry to raise revenue, a leading retailer and banker said yesterday.

Bank of Bermuda chairman and president of Trimingham Brothers department store Mr. Eldon Trimingham said that with thousands of people employed in the retail trade and large amounts of duty paid by retailers, Government derives a significant portion of taxes from the industry.

It is revenue, he said, Government would have to get elsewhere if the retail business continued to shrink.

He reasoned, "We would have to put the tax burden on other industries. If the tourism industry and the retail industry, which is all inter-connected, continues to shrink, the tax generated by that sector will be diminished and would have to be picked up by the only other industry we have -- the financial industry, banking and the rest of it.

"The net result of the financial industry losing its competitive edge would be a loss of that business to other jurisdictions. I think that it is important for Government to realise that the tourism/retail side of our economy should be nurtured, or else someone else will have to pay the taxes lost from those businesses.'' Mr. Trimingham was responding to remarks made about the industry by his institutional counterpart, Bank of Butterfield chairman, Sir David Gibbons, at the annual general meeting of the Chamber of Commerce.

Sir David on Tuesday said that retailers, faced with declining retail trade, would have to consider mergers and other joint opportunities as a means of becoming more competitive and staying alive.

And yesterday, expanding on his speech, Sir David called on the retail industry to conduct a review of the competitive position of Bermuda businesses, as a consequence to the real fall-off in consumer demand and the rapidly escalating incidence of overseas shopping by Bermuda residents.

Sir David said, "Everybody is complaining about the poor to virtually non-existent profits. Business is not going to come back like it was up to 1990.'' He said the best way to boost profits was "by consolidation, or combining the overheads to lessen the load on an individual business. In many instances you can have a consolidation and better service the public under one roof, instead of two.'' Sir David said there were fewer residents walking around looking for ways to spend money, with recent statistics showing thousands of empty housing units, and reduced numbers of work permits.

Sir David pointed out the shopping malls in the US that Bermuda retailers are competing with are not going away, and are in fact getting better.

Improved air links to the Eastern seaboard has opened up other shopping opportunities at prices Bermuda companies can not match.

Meanwhile, Mr. Trimingham said he would not be surprised to see more mergers, considering the state of the industry. But he said that although it would create more efficiencies and better economic stability, there would be a decrease in selection.

He described the City of Hamilton as the best "shopping mall'' to be found in any of the "islands''.

But he argued the problem with mergers and consolidation is that there would be a reduction in the variety of products, making the product selection less attractive to the consumer.

Mr. Trimingham said, "The biggest problem the Bermuda retailer faces is non-competitiveness as far as price is concerned.

"There are some things that you can't compete with. We will never be able to have the prices of a Wal-Mart or K-Mart. But the average American tourist is not here to buy things that they can get in those stores.

"What we have to do is keep a broad selection of merchandise that is attractive to our tourists, so that they can do their part in supporting the retail industry in Bermuda, while allowing for local trade.

"Sir David is quite right that the competition is immense from shopping malls in the states where people like to travel. People like to go to the malls, because it is a fun thing to do when travelling.

"The big problem for the retailers is that there is a large artificial increase in price as a result of import duty. A chamber survey some years ago estimated that the artificial increase was averaging about 17 percent.'' SIR DAVID: Business won't be back like pre-1990 days.