increased by $2-and-a-half million.

Bermuda's quarterly bulletin of statistics released this week show residents spent a total of $31.36 million last year on 126,031 trips.

And the greatest expenditure took place between October and December as locals paid out almost $10 million to foreign cash registers.

Many retailers were dismayed, but not surprised, by the recent figures when contacted by The Royal Gazette .

"Obviously Bermudians are just like anybody else, they all shop where the price is best,'' said one representative of a local chain.

"Bermudians increasingly will not accept a price difference between here and the US,'' he said. "They do not understand why they should pay $60 for what is recognised as a $50 item.

"Whenever it's an option, they say `We are going away next month, we'll do our shopping there'.'' Government's figures are derived from customs declaration forms, but the retailer pointed out the cost of smuggled goods often went unknown.

"About three years ago there were focus group surveys by Hamilton retailers,'' he said.

"According to those, about twice what was declared was actually bought overseas. This particularly relates to things like clothing.'' However, Robert Rego of the Knick Knack was more optimistic about non-declared goods.

Efforts to make Customs experience more "user friendly'' were paying off, he said.

"With the system in place at Customs now, people are making more honest declarations,'' he explained. "It's encouraging more returning residents to declare their purchases in a more accurate fashion.'' But Peter Cooper, managing director of A.S. Coopers and the chairman of the tourist oriented retail division of the Bermuda Chamber of Commerce, also pointed out the hidden revenue lost to internet and mail order shopping.

And he said retailers had suffered for years under import duties which forced them into a "downward spiral'' of revenue.

In 1996 residents spent $28.49 million overseas. The following year rose to $28.89.

Clothing and footwear remain the most popular of overseas items, followed by household items, furniture and appliances, and electronic and photographic equipment.

"Every dollar spent overseas obviously is money that is not going to be spent in the local economy,'' said Mr. Rego.

At least two small businesses said they were unaffected by the rise in overseas spending.

"I don't think that it has affected us too much because our figures are still up,'' said a spokesperson for the 27th Century boutique.

She credited the state of the Island's construction market as having a greater influence on store receipts.

And Sheila Robertson of the Harbourmaster said providing competitive prices and specialised products was key to keeping a local clientele.

"I don't feel threatened,'' she said. "If you do well, you do well. And if you treat your customers well and give them good service, they will keep coming back to you.''