Overseas purchases by residents returning to the Island from business and vacation trips plummeted 40.3 percent in May 2005, while total retail sales for the month advanced 7.3 percent, a somewhat slower pace an 11 percent increase recorded in April 2005.

The total value of May retail sales reached $53.8 million ? a $3.7 million improvement over the same period a year ago, according to statistics in the monthly Government bulletin released yesterday.

After adjusting for inflation, the volume of retail sales rose 4.1 percent continuing the strong upward momentum of the past two months.

Overseas purchases for the month of May stood at $2.8 million, down $1.9 million from May last year when returning residents declared $4.69 million worth of overseas purchases.

The May 2005 overseas spending is the smallest recorded since October 2003 occurred even though the number of residents taking trips in May 2005 increased slightly to 12,459 residents compared to 12,385 residents who took trips in May 2004.

The Department of Statistics said however that the purpose of the trips was behind the decline in spending. While most people who went away in May 2005 did so for business purposes, in May 2004 most people went away on vacation or to visit a friend or relative.

Spending activity is always greater when the trip is for pleasure as those travelling on business are not as inclined to spend, the department said.

Somers Cooper, co-chair of the retail division of the Chamber of Commerce, said however that the RSI does not currently tell the whole story on overseas spending.

?One area not covered in these statistics are goods brought in via the post office and courier services ? mail order goods. I would imagine that this has already increased with the demise of Trimingham?s-Smiths as the Island?s consumers struggle to find certain goods. Categories of immediate short term consumer concern are children?s clothing, lingerie, ladies and men?s fashions and cosmetics.

?I am sure the Island?s retailers are working to fill in the gaps but the question is, will there will be enough retail real estate left in the long term to replace the volume of business lost??

All retail sectors reported higher sales with the exception of the apparel sector, which includes department stores. It declined 1.6 percent from the same period a year ago after a major department store reduced its prices and therefore negatively impacted its own profit as well as the profit of other competitors who cannot offer the same reductions, the department said.

But other categories covered under the RSI are booming, with motor vehicle dealers, service stations and building material vendors registering double digit growth in May 2005.

The launch of a new and expanded vehicle line-up once again drove sales for motor vehicle dealers up 21.6 percent, the largest monthly increase since August 2004.

Construction boosted retailing activity in the building and hardware sector by 18.6 percent over May 2004. Sustained high levels of construction activity translated into higher sales for building and hardware vendors who supply construction-related materials, the department said.

Service stations experienced a significant surge in trading as sales leapt 19.1 percent, the largest monthly gain since January 2001.

?The sales gains reported by service stations the last three months is mostly attributable to the high cost of premium and mixed fuel,? the department said.

Groceries continued to enjoy robust sales with gross receipts from local stores growing 7.7 percent in May over the same period last year. The upward movement in sales receipts was brought about by a 2.9 percent rise in the prices paid for food items.

Combined retail sales totalled $56.6 million, up 3.2 percent from May of last year. While local sales advanced 7.3 percent, the sharp reduction in overseas purchases resulted in the overseas portion of combined retail sales claiming a smaller share of combined retail sales, falling from 8.7 percent in 2004 to 4.9 percent in May 2005.

There were 25 total shopping days in May 2004 and 2005. The May 2005 index for total retail sales stood at 162.7.