Retail sales volume fell for the 27th straight month as inflation-adjusted sales dropped 8.1 percent in July.

Consumers spent $94.7 million on purchases during the month, representing a six percent or $6 million decline in sales compared to the same period last year.

Building materials and motor vehicle retailers were hardest hit, with the former down 27.7 percent and the latter plunging 33 percent.

Kristi Grayston, chairman of the retail division of the Bermuda Chamber of Commerce, said that all sectors had been impacted by the economic crisis, as was reflected in the building materials figures and the slowdown in the construction industry.

She said that retail sales had fallen so far that even if they did stabilise it would take some time to properly recover with a number of stores already going out of business and more empty shop- fronts expected in the fourth quarter.

Added to that was an eight percent increase in overseas purchases with residents declaring $5.4 million during July versus the same period in 2009, but rises in both air and cruise ship arrivals had prompted a substantial increase in sales for tourist-related stores as gross receipts climbed 24.3 percent.

Ms Grayston said that a vibrant retail and restaurant was the backbone to the country's infrastructure — but both were suffering from the recession.

"From a retailer's point of view, our cash flow is stagnant and we have to choose between the status quo of the inventory and bringing in new product," she said.

"My opinion is that I try to buy as carefully as I can while providing a good choice, but we are getting to a place where we can't please all of our customers."

She said that retailers were carrying much less stock than previously and that most people shopped overseas for reasons of choice rather than price.

"More people go away for selection than price," she said.

"I think people need to realise that that will impact them at some point further down the road when they are looking for something in Bermuda and won't be able to find it because it is no longer available."

Ms Grayston said that the retail community as a whole was working hard to provide great product, while the quality of customer service had improved as a result of the knock-on effect of competition for jobs following the economic downturn.

All other store type retailers reported a 1.2 percent decrease in sales revenue, with marine and boat supply traders seeing the biggest decline of 15.2 percent. Furniture and appliance sales fell by seven percent, while pharmaceutical sales were down two percent.

Apparel retailers also experienced a one percent decrease in sales revenue during the month of July over the same month last year.

But gross receipts for food stores rose one percent, as food prices climbed 3.1 percent, and liquor sales advanced 3.3 percent year-over-year.

Service stations reported a sales increase of 1.6 percent for July, with fuel prices 4.4 percent higher than in 2009, indicating a decline in sales volume for the month.