Kristi Grayston, chairwoman of retail for the Bermuda Chamber of Commerce, sees a modest improvement in consumer spending on the horizon.In the meantime, she said, this week’s upcoming Budget will be “highly significant” for the Island’s retail sector.She said: “It’s more a wish list than a prediction, but one thing a lot of retailers have been talking about is getting rid of tariffs on imports and switching over to a value added tax (VAT) system.“Right now we’re paying duty up front. VAT allows us to pay duty simply on what we sell. We may see a break along those lines.“There’s also a duty free allowance for retail refurbishment that will expire in March of this year, which Government could extend. Those are two things that could have a big impact.“I believe the Premier is friendly to retail and understands how serious this is. Government needs to come up with revenue but for retailers this is becoming an island where you pay your taxes until you can’t any more.”For the Island’s embattled retail sector, after two and a half years of declining monthly figures, there is nowhere to go but up.Speaking during a trip to New York City to purchase items for her Bermuda business, Ms Grayston said her expectations for 2011 were being reflected in her spending.Asked if she expected an upswing in consumer spending, she said: “I’m not buying stock with that in mind, and I’m not placing any big orders.“There are a lot of other Bermudian retailers in New York at the moment buying in advance, and I’m seeing a lot of Bermudians behaving the same way. I heard of one who said right out that there were some beautiful things on offer but they didn’t know how to pay for any of them.”In the meantime, retail workers in Bermuda can expect to see cuts in hours and leaner rosters for staff. “I know we have had cut our store hours back at Pulp & Circumstance. We’ve got people working five day weeks for three weeks out of the month, and then doing one three day week. It’s going on everywhere, and we’re going to see more of it.”However, if US consumer confidence is any indicator, Bermudians also ought to be spending a little more by the summer.“We’re seeing little upward bumps in US retail,” Ms Grayston noted.“These should be positive for us. If air arrivals are up come the tourist season this summer, it’s going to give our economy some help it badly needs.”Bermuda, she said, “tends to lag six months behind the US economy”.However, the closure of one more large, iconic Bermudian store could prove fatal.“My biggest concern is that we protect our big retailers, because losing a Coopers or a Gibbons would hurt all of us. Bermuda retail won’t survive another big store going under losing Triminghams and Smith’s was our first kick off the ledge. It encouraged a massive amount of buying overseas. We can’t have it happen again.”In that respect, local retailers must ensure that once Bermudians have more money to spend, they spend locally.Ms Grayston said big Bermuda stores were particularly vulnerable because “the cost of doing business is horrendous. If you’re big in Bermuda, your margins are still tight because of payroll, health insurance, payroll tax and so on.”In light of business costs, Bermuda’s ‘Shop Local’ campaign has a lot riding on it.“The idea needs to catch on,” she said.“In the US they have the 3/50 Project, which is all about supporting independent retail. The idea is to encourage people to think of their three favourite retailers, places they’d miss if they went out of business, and commit to spending $50 a month in those businesses.”The project was set up in March, 2009 by US entrepreneur and blogger Cinda Baxter.Enjoyed viral success online, the 3/50 Project spread to Canada, and similar versions are now being contemplated for the UK and Australia.Ms Grayston said Bermuda may have to adopt similar schemes in the effort to “sell Bermuda to Bermudians” as consumers become more adventurous with their budgets.Speaking later to The Royal Gazette after her return from New York, Ms Grayston said she still felt guardedly optimistic for local retail.She added: “I found a lot of good stock for this year.“But there were plenty of things up there that I wished I’d been able to buy.”Useful web links: www.bermudacommerce.com, www.gov.bm, www.the350project.net