Retailers last night predicted tough times ahead after one of the most dismal Christmas sales in Bermuda.

They claimed there had been no marked Christmas rush or sales frenzy and said, as a result, there could be a shake-up of the industry within the next few months.

Chairman of the Chamber of Commerce's retail division George Grundmuller, who is also president and CEO of Phoenix Stores, said retailers across the Island would have to take action to make up the shortfall in profits.

And he said the fallout could come in the form of staff cutbacks, reductions in operating hours, and even outright closure of some stores.

Mr. Grundmuller said he had spoken with several retailers who indicated that Christmas sales figures did not meet expectations, even with increased sales on the last two shopping days before Christmas and big after-Christmas discounts.

And he said larger stores had suffered the most, and that small, specialised stores were better equipped to survive poor retail figures, which first began declining sharply in September.

The retail spokesman said declining tourist numbers were less of a factor during the Christmas period.

But instead he blamed the gloomy sales figures on increased overseas spending by residents and a boost in internet shopping.

Mr. Grundmuller said: "We haven't seen the figures from Government, but there are indications that people brought a lot back from overseas.

"And with internet shopping, people have begun to buy clothes online, when before it was mostly things like books.

"But people are talking about a slowing economy in the States, too, and that truly has an effect on people (in Bermuda).

"Maybe we are just not spending so much this year.'' David Gibbons, Managing Director of Gibbons Company department store, said it was a very challenging time for all retailers on the Island.

And he said part of the problem was that Bermuda had quite a substantial shopping centre for such a small Island, meaning competition was high.

Mr. Gibbons said: "We were very pleased with the sales at the beginning of last year up until about September when there was a noticeable decline when comparing year on year.

"If that continues, then we will have to look at trying to find new ways of improving business.

"From the point of view of Gibbons, I think the challenges we have are internet shopping and overseas shopping. We need to do better to show the Bermuda customer that we do have a good selection of products at a competitive price.

"We need to investigate ways of giving the people in Bermuda what they want.

It's a very competitive industry.

Tough times ahead for Island stores "There is an awful lot of business out there for a small Island -I think everyone will be looking at how they can do things to meet these challenges.'' And Roger Davidson, President of Smith's department store, told a similar tale, saying he had never known such lean times.

"In general terms, it's very challenging,'' he said.

"Locals are shopping abroad and there are not very many tourists here so it makes it a pretty big challenge.

"A lot of people go abroad on holiday and shop while they are away. They can get vast selections of merchandise and prices are very competitive.

"The costs associated with merchandising in Bermuda are very high. I don't think anyone can expect a small Island like Bermuda to compete with North America.'' But he said he had never found an Island as small as Bermuda with such an extensive and quality shopping centre, and for that, people should be glad.

And Mr. Davidson agreed that retailers would probably have to find ways of reducing their overheads to meet the loss in takings, or find new ways of increasing the sales.

He added: "Along with all of our competitors, we are doing the best job we can in making ourselves more efficient, but it's a daily challenge.

"I think most people have been gradually reducing their numbers of employees in any case over the years and I think everyone is continually trying to be more efficient in any way they can.

"I think the whole community is struggling.'' Figures released by the delivery services on the Island supported the claims that internet shopping had risen sharply.

International Bonded Couriers, which offers the ZipX package forwarding service, said it saw an 87 to 89 percent year-on-year increase in revenue during the pre-Christmas period.