some smaller merchants have conceded in an informal survey that they know of more than one City business that is on the verge of sinking.

But small merchants were full of praise for the Chamber of Commerce and Harbour Nights.

In fact, more and more City businesses are seriously considering remaining open at night, especially when cruise ships are in.

But despite that bright spot, small company owners said hopes that 1995 would be the year in which they finally recovered from the recession of the early 1990s have not been met.

Concerns of small business owners were varied, although they almost all felt more needed to be done to stabilise the tourism product.

Mr. Robin Gilbert of clothes retailer, Pirate's Port, which caters almost exclusively to the local market, noted that companies facing the crunch had to get better.

He said: "Bermuda doesn't operate in a vacuum. It is not another world. If we are hurting retailwise, maybe it is the same elsewhere.

"You can't be critical of our tourism programme. Maybe reduced numbers are due to to an industry trend.

"One thing that does concern me is the need for more variety or selection in our stores. Merchants need to widen the scope of products. We can't all go out and shop for the same garments, for example. We must increase the variety.'' Small Business Development Corporation general manager, Ms Michelle Khaldun, conceded that business was changing and successful entrepreneurs will be the ones who change with the times.

She said: "I've seen fewer people coming in for advice on the start-up of retail business. More people are looking to niche areas such as special types of shoes or specific computer products.

"The new small companies are sticking to specific and innovative product lines. Retailers for years have had to compete with shopping malls overseas.'' Some merchants who are facing the prospect of paying overdrafts and loans refused to be identified and spoke to us on the condition of anonymity.

Not the least of the problems of the small business is overheads that include City rents. One businessman said: "The overheads have been too much for small merchants. The high rents were based on high volume. Now we don't have the high volume of business we used to have, but the overheads have still gone up.'' Another complaint was that Bermuda was becoming a "T-shirt and hamburger'' destination which had always justified its expensive nature by insisting that it was not targeting a "tee shirt and hamburger'' crowd.

"If you look through shop windows, you see more T-shirts than I can ever remember,'' one said. "The quality of our merchandise in general has been eroded. It panders to the cruise ship crowd. That was never what we were about.'' And Mr. R.R. Mutzke of Portobello Coins & Antiques said: "Sure, there are companies that are living off overdrafts and loans. There are people throwing in their own money, hoping the economy is going to get better.

"Some shops did badly last year, but some are worse off this year. But I keep seeing some little things that bother me.

"Just look at the sidewalk outside the Emporium building. It is all stained up, probably as a result of the garbage. It looks unsightly and visitors have mentioned this to me. Does nobody care any more?'' On another note, he said: "Bermuda residents are just not as friendly as they used to be. People who have been visiting Bermuda for many years really notice it. I hear it all the time. It's a matter of attitude.

"As regards tourism, we have the whole mainland in front of us and we can't get about a half a million people to fly here out of 280 million people.

"Lufthansa could not fill one plane a week from Frankfurt to Bermuda. Out of 80 million people, and Germans like to travel, and do travel a lot.

"I've spoken to visitors from Britain, who liked Bermuda, but couldn't understand why they had seen so little advertising in Britain for the Island.

"I've heard this from British visitors on many occasions.'' Jeweller, Mr. Sayeed Ramadan of Personalized Jewellery, felt that the Island was besieged with cruise ship visitors, many who were looking for an inexpensive holiday.

He said that once that was allowed, it almost naturally precluded the arrival of some well heeled air arrivals.

He said: "The cruise ship industry is very fierce and you have some people paying for a cruise to Bermuda right now who are paying $700, under $1,000.

"The people who are coming and staying in Bermuda, and spending money in Bermuda, and really feeding the economy in Bermuda like the restaurants and other places, stay in hotels.

"They are the air arrivals and they do not necessarily want to come down here and rub shoulders and compete for lines with cruise ship passengers who are coming in waves.

"It is a natural inclination for people who shop in Tiffany's, or Sak's Fifth Avenue. They do not go to the bargain basement stores.

"If we want to get more air arrivals, we have to target more places. We are nine hours from a lot of places on the globe. We don't have to just concentrate on the East Coast of the US.

"Bermuda has always been considered to be expensive. I don't see why it is that difficult to fill the five or six hundred thousand person quota that we need in air arrivals. Other destinations are attracting millions of people.'' Mr. Stuart Joblin, one of the principles of Front Street retailer, Makin' Waves, summed up the feeling of a number of small businesses.

He said: "The season did start out a lot slower than we had hoped. Last year there was a bit of an improvement, which was the first year of improvement after a number of not so good years.'' He said July had picked up, although he voiced concern among small businesses about the latest word that at least one hotel was considering summer lay-offs.

"We are talking about lay-offs in August, in-season. If you are not making it there, you are not going to make it. We were concerned that because it was a downturn in the early part of the year, it would have to be an exceptional second half to make up the losses, or the non-realised gains.

"But now, who knows what's going to happen.'' One merchant said that his retail business had cut costs to the bone, removing a lot of unnecessary expenditure.

"We spend a lot less on advertising,'' he said. "If we only knew what we know now, when we first opened up. We are so much better at spending our money. That is the only positive at the moment, however. Me and my partner will hang in there.'' Some merchants were concerned about some instances of declining service standards at a time when there should be a collective push to get better.

Said one businessman: "What I hear as a serious complaint is mostly about price. People say Bermuda is too expensive. They wouldn't mind so much, if they are getting value for money.

"If you are paying 300 bucks a night at a hotel, you don't expect to have to deal with people who are in a bad mood. It is nature to have bad days, but if you are in the service industry, serve is what you have to do. Grin and bear it.

"To get the tourists back though, we will have to make some changes. We need to be more innovative. In a lot of aspects, Bermuda is doing in 1995, the same things they were doing in 1955. It's the same activities, the same market -- golf, tennis and honeymoons. That's great, but the rest of the world is changing.'' SALES SLUMP -- The volume of retail sales was down 0.4 percent in May compared to the same month a year earlier. The sales figures were an improvement over April, but still marked the fourth straight month that sales were down compared to 1994.

SHIRT SALE -- Visitors look at T-shirts at a Hamilton shop this week. Some small retailers say that Bermuda is becoming a "T-shirt and hamburgers destination''.