Retail sales for October 2005 advanced a nominal 1.9 percent following a 3.9 percent increase last month, according to the Bermuda Retail Sales Index released yesterday.

After adjusting for the annual rate of inflation of 2.9 percent in October 2005, the volume of retail sales fell 0.9 percent, the first drop in volume sales this year since February 2005.

A drop in the Retail Sales Volume Index reflects a reduction in the total quantity of goods sold.

Just two sectors recorded declines with both down for the fourth consecutive month. Gross sales revenues in the apparel sector fell a further 33.4 percent in October 2005 as that sector continues to be negatively impacted by the July 2005 closure of Trimingham?s/Smiths.

Sales of construction related materials also declined a further 1.5 percent in sharp contrast to the double-digit gains that were recorded in the second quarter of this year for retailers of building materials and supplies.

The October 2005 index for total retail sales stood at 156.5 index points.

All other sectors in the index reported gains with the largest of those recorded by retailers in the Motor Vehicles, Service Stations and Food Stores sectors.

New car sales surged by 19.6 percent in October 2005 versus October 2004 due primarily to increased stock levels along with increased purchases of larger vehicles, the Department of Statistics said.

Rising fuel costs drove service stations to register a 26 percent increase in sales ? the largest monthly gain since the introduction of the series in 1995.

The Department of Statistics said this increase was tied directly to a 14.8 percent increase in the cost of premium gas and a 14.2 percent increase in the cost of mixed gas in October 2005 versus October 2004 and not due to an increase in actual consumption.

Gross receipts for food stores advanced 5.9 percent in October 2005 due partially to the 3.8 percent rise in food items during the month, the Department of Statistics said.

Residents returning to the Island from business and vacation trips declared overseas purchases of $4.7 million during the month of October, up just $200,000 over last October?s overseas purchases.

Overseas spending represented only 8.2 percent of combined local and overseas retail sales of $56.5 million in October 2005. Total retail sales were up $1.1 million over October 2004. There were 26 shopping days in both October 2004 and 2005.