Slump a 'bloodbath' for local retailers
The economic slump is a "bloodbath" for retailers – especially for those dependent on the tourism sector, one leading retailer said yesterday.
Ronnie Maughan, director of operations of the Maughan Group, which runs the English Sports Shop, described the current slump in retail sales as an absolute "bloodbath".
"It is a bloodbath for retailers, particularly for the likes of us who are so reliant on tourism," he said. "It is just absolute murder."
Retail sales plummeted nine percent or $7 million in July compared to the same period last year, as per the latest Government statistics.
The Retail Sales Index revealed that apparel stores and motor vehicle stores were hit hardest, as fewer tourist arrivals and a cutback on consumer spending took their toll on the sectors.
Apparel sales continued to slide as traders suffered an 18 percent plunge in revenue for the month of July – a trend which has been in reverse for the past year.
Meanwhile the motor vehicles sector experienced its third consecutive month of falling sales, with dealers reporting a six percent drop versus a two percent decline in July, 2008, primarily down to weak consumer demand for vehicle models currently in stock.
Mr. Maughan said there were many different reasons behind the slump in sales over the past year-and-a-half, including the double whammy of lack of cruise ships in Hamilton and the recession.
"It is not getting any better," he said. "The hotels are empty and when they have occupancy it is on the $99 special deals and that is not the calibre of tourist needed for this Island's economy."
He said he had yet to find a "light at the end of the tunnel" and it seemed that there was no answer to the problem, with his own company having battened down the hatches and made itself as efficient as possible, from reducing its inventory to cutting down on staffing numbers and hours, taking on less employees than in past years and in some cases leaving positions unfilled, with no plans to change that policy for the next 12 months.
"I just see nothing on the horizon to give any encouragement and I am usually very much an optimist and a cup half-full type of person," he said.
"I just find the whole thing very depressing."
Meanwhile, another leading retailer said fears over companies leaving Bermuda and job losses had fuelled the fall in retail sales for the 16th straight month.
Paula Clarke, CEO of the Gibbons Company department store, said that the economic downturn combined with a drop in tourist numbers were the main contributing factors
Ms Clarke said that there had not been the same foot flow of customers in Hamilton as in previous seasons, while consumer confidence had taken a hit from companies shutting down and staff being made redundant.
"I think primarily the fall in retail sales is down to the economic downturn combined with the tourism programme for this year, which has not been that exciting," she said.
"Added to this, people are concerned because they are seeing companies leave Bermuda and job losses."
But she had seen signs of a recovery, with back to school sales kick-starting a slow year in September, however she added that her company was always looking further ahead to improve its product and offering.
"I do see an indication that things are changing and we are cautiously optimistic going forward," she said.
"I have to say that we are rarely content with our strategy and we are always looking to new ways of doing things, looking at what we are good at and focusing on how to improve ourselves at the same time as providing our customers with good quality and value goods and services."
Ms Clarke said the Gibbons Company had proactively implemented a number of new initiatives, such as relaunching in June and regularly updating its website, and introduced new lines of merchandise, adding that she was grateful for the support the company had received from Government during these tough economic times, but calling on them to provide more relief for businesses in the form of cutting the cost of payroll tax to put retailers on a more equal footing with their US competitors.
"Our aim is to keep the dollars in Bermuda and to continue to fuel the Bermudian economy," she said.
"But I think the biggest single thing Government could do is to give some relief on payroll tax, because the cost of doing business in Bermuda is significantly higher than stores in the US, when we offer the same prices as in the US."