Office suppliers and furniture retailers say the August 15 referendum on Independence could be behind soft summer sales.

While Retail Sales Index May figures released yesterday indicated a relatively stronger demand for household furniture, furnishings and building materials, most retailers contacted by The Royal Gazette said sales in May were unexceptional.

Many claimed summer sales had proved softer than expected adding they suspected some customers were delaying major purchases in the run up to the referendum.

"We haven't seen a strong month in a long time,'' said owner/manager of Mayne's Furniture store, Mr. William Mayne. "The referendum has got everyone strangled until it is decided which way we're going.'' He said the summer was looking fair but "not strong by a long way''.

But Finance Minister the Hon. Dr. Saul said low visitor numbers -- not the referendum were to blame.

The fact that residents spent less overseas in May was also an indication that fewer visitor generated dollars were in circulation. It created a "knock-on'' effect, he said.

President of Bermuda Furnishing and Supply Ltd. Mr. Rolf Luthi was circumspect about the impact of the referendum on sales.

He said he had seen no direct evidence to back the theory that the referendum was to blame for soft summer sales but admitted it may have scared off some extra business.

Spring, he said, was generally a good month for furnishing sales but May 1995 had been unexceptional.

"It was about the same as last year,'' he said. "We didn't get the anticipated income we were expecting. We were very upbeat at the end of last year but things seem to have slowed down. The summer is looking flat and it's not good.'' Only Mr. David Rego, owner/manger of Rego Furniture on Reid Street admitted the store had seen sales increases in May which he attributed to discounting that month but since then sales had slackened.

"We are not having a strong summer,'' he said. "Sales are soft.'' Galleria manager Mr. David Goodwin claimed customers furnishing condos and offices were holding off on big purchases.

"There is a resistance to spending on big items. I can only attribute it to that (the referendum).'' Manager of B.T.S. Construction Ltd. claimed all businesses were feeling the impact of uncertainty in the run-up to the referendum.

But if the outcome was favourable to property owners, he anticipated a rush of work as architects released plans currently on hold.

Retail Sales Index figures showed the total value of sales in May rose by 1.9 percent with a gross turnover of $42.8 million.

But the marginal increase was offset by inflation which caused a 0.4 percent drop in sales volume making May the fourth consecutive month in which volume of sales dropped.

While petrol sales increased, car, motorcycle, clothing, footwear, household appliances and alcohol sales were all below those of May 1995. On a brighter note for local merchants, overseas purchases by residents fell by 0.4 percent following an almost five percent drop in April.

Declared purchases overseas in May were valued at $2.25 million.