Retail business in 1998 was flat or slightly better than in previous years.

But shopowners do not expect much change or help from the Progressive Labour Party Government's first Budget. Ahmed ElAmin reports.

Last year was generally stable for sales in Bermuda's troubled retail sector, according to business operators around the Island.

And the retailers generally don't expect much in the way of change in the PLP's first Budget to be given Friday.

Retailers from Front Street to Court Street believe the budget will be a conservative one as the PLP attempts to get a handle on the economy and focuses more on more pressing concerns such as tourism, housing, education and electronic commerce.

Statistics up to the end of November indicate 1998 retail sales picked up from the slumps of the previous years. While retail sales were flat in November compared to November, 1997 the earlier part of the year showed good growth.

Except for 0.1 percent growth rate in November, monthly retail sales real growth rates after adjusting for inflation ranged between 2.3 and 11.3 percent during 1998 compared to 1997.

Hardware and appliance retailer Gorham's Ltd. enjoyed "modest growth'' in sales according to general manager Rod Ferguson. Bermuda's retail sector is in the process of restructuring to meet the competition locally and abroad. Like competitor Masters Ltd., Gorham's spent 1998 renovating its outlet on St.

John's Road.

With the expansion, Gorham's added 9,000 square feet of retail floor space to bring the total to 25,000 square feet. The investment paid off as sales surged 50 percent after the store opened in early November and Gorham's enjoyed a "banner'' Christmas season, Mr. Ferguson said.

"We would have enjoyed a better year if we did not have the construction going on in the related store next door,'' Mr. Ferguson said. "The traffic , noise and mess distracted some of the buyers and managers. We weren't unhappy with the year. We beat inflation by several points.'' He expects the PLP's first Budget will not make any major changes affecting the retail sector.

"I anticipate there won't be any great changes,'' he said. "The intention is to look at the entire tax structure. It will be a modest Budget and we will see some substantial changes the following year.'' Gorham's strategy in the age of the Internet is to focus on items not easily transported from abroad by returning residents. Other retailers have remarked on the dangers Internet shopping pose to the local businesses.

"The big flaw in Internet shopping is in returning goods,'' he said.

"Internet shopping will affect other firms more than Gorham's.

"We realise where we are going to service the local market is by focusing on things that are bulky and hard to handle. For such items overseas shopping loses its advantages once freight charges are calculated.'' Front Street retailer Trimingham's came in short of projected sales, president Eldon Trimingham said.

"We were a little short of plan, not seriously though,'' he said. "Christmas was pretty much the same story. Retailers of this type, the bigger retailer, are competing head to head with the US retail industry. We now price our US merchandise at US prices. It makes it a difficult proposition to compete.'' The lack of growth in the tourism sector is directly affecting sales while margins have come down as the store attempts to become more competitive.

"It's a precarious way of operating,'' he said.

He believes one answer is for Bermuda to promote duty free shopping.

"Those are the magic words for the tourist,'' he said.

And he doesn't expect "a great deal'' from the upcoming Budget.

"The new Finance Minister is saddled with the old Budget,'' he said. "He will undoubtedly have that to deal with. The UBP was not famous for their attention to the tourism problem. I think it will take him some time to get to the problem.'' Over in St. George's, Designer Bazaar owner Jean Weldon said Christmas sales were hurt by heavy sales promotions by the bigger stores in Hamilton. Designer Bazaar, which has been in business for 11 years, sells women's wear and accessories. Overall though 1998 sales was comparable to 1997 even thought there was a drop of 50 percent in the last quarter.

"The last quarter was the poorest compared to any year we've been in business,'' she said. "The town was virtually empty. There were aggressive sales on the part of the major stores. I have never seen sales like that before. The sales started in October. We haven't had that before, which tells us a lot about sales in those stores.'' Along Court Street, a decision by Tuff Shoes to move to a new location up the road paid off. The move in December, 1997 meant the store had five times more display area and subsequently sales increased for the year.

However owner Davano Spencer complained that this year Christmas sales were down which he blamed on the airlines not getting him stock on time. He admits that he had ordered earlier last year to prepare for the move. Still, he sent in his Christmas orders on November 11 and is still waiting for some stock.

The airlines usually cut back on the number of flights and the size of aircraft during the off season making it harder for businesses to get their stock on time.

"I could have ordered earlier but that's usually been plenty of time,'' he said. "It didn't work out. The airlines do this to the Island every year.

Business is being hurt. Because I couldn't get stock in, Christmas sales were depressed. The day before Christmas I got a big stock order in but even a week before would have been better. I can't complain, It was still good business.'' He said he made $10,000 less in sales in the weeks leading up to Christmas compared to last year. On Christmas Eve he took in $3,000 more. Mr. Spencer sells his shoes at about $10 to $15 above US prices and he believes he can compete with anyone on the Island.

As to the upcoming Budget he just wants things to stay the same.

"I hope they don't put duty up,'' Mr. Spencer said. "It's what kills us. I would be happy if they just leave it that way. It would be nice if they take down duty on some things.'' At Show Me Some Love Boutique owner Pamela Daley said 1998 sales remained at the same level as 1997.

"It was a little better,'' she said. "1997 was a great year while 1998 was a little better. This year could possibly be as good.'' She competes with Front Street by researching prices at the various stores and she adjusted as items went on sales.

"I go down as they go down,'' she said.

More and more people are also venturing on the Court Street to shop. Many businesses stay open later into the evening and that's when traffic increases.

Show Me Love stays open as late as 10 p.m. Thursday to Saturday.

Ms Daley said she believes attitudes toward shopping on Court Street will have to change before business gets better. Her store attracts a variety of people, black and white, because of its location next to the Jamaican Grill.

It's all a matter of perception in the media and the way the street is associated in news reports. People hear a story and associate Police, crime and Court Street.

She suggests Police need to put regular foot patrols along Court Street, not so much as to combat crime but also to get a better feel for the community.

"I don't see any foot patrols along here,'' she said. "They should put some in so they can get to know the community. It would be nice to have a relationship with the community. People will then feel more comfortable with the area and that it's all right to shop here.'' That's an issue she'd like to see addressed in the budget.

Meanwhile the lone dissenting voice in the picture is HA&E Smith Ltd.

president Roger Davidson.

"It's been a poor year for retailers,'' he said. "Tourism was down.

Residents turned to shopping overseas in increasing numbers and the fierce competition lead to a huge amount of discounting which left very little margin to operate with. That was the case with all retailers and if they said different then they weren't telling the truth.'' He's hopeful the upcoming Budget will acknowledge the difficulties in the retail sector through a relaxation of duties.

"We would like some relaxation on red tape and controls which is always expensive to operate under,'' he said.