LANSING, MI--(Marketwire - January 23, 2008) - Michigan retailers are cautious in their
projections for 1st Quarter sales, following a disappointing holiday
season, according to the Michigan Retail Index, a joint project of Michigan
Retailers Association and the Federal Reserve Bank of Chicago.
Although the overall retail industry's three-month outlook remains
positive, the level of optimism is at its lowest point in seven years.
Holiday sales were disappointing for the majority of retailers, who went
into the season expecting, on average, a 2.2 percent gain. However, only
34.5 percent increased sales, while 49.1 percent experienced declines and
another 16.4 percent reported no change.
On a more positive note, nearly a fifth of the industry -- 19.7 percent --
rang up holiday sales increases greater than 5 percent, while another 14.8
percent recorded gains of 0.1-5 percent.
"Retailers expected a tough season, and it was," said James P. Hallan, MRA
president and CEO. "Given the many economic challenges facing retailers,
it's remarkable that half of them did as well or better than the previous
year."
"As policymakers consider actions to stimulate the national and state
economies, they must focus on plans to boost consumer spending and increase
retail activity," he added.
Sales for all of 2007 appeared slightly better than the holiday figures.
The Index found 48.5 percent posted better sales than the previous year;
51.5 percent had lower sales.
For December, the Index showed 30 percent of retailers increased sales over
the same month last year, while 54 percent recorded declines and 14 percent
saw no change. The results create a seasonally adjusted performance index
of 38.5, down from 48.1 in November.
In addition, 36 percent believe their sales will increase for
January-March, while 36 percent forecast declines and 23 percent project no
change. The results create a seasonally adjusted outlook index of 55.5,
down from 56.0 in November.
Note: William Strauss, Senior Economist and Economic Advisor with the
Federal Reserve Bank of Chicago, can be reached at 312.322.8151.
Michigan Retailers Association/Federal Reserve Bank of Chicago
Michigan Retail Index
December 2007 results
Index figures dating to July 1994 are available at
www.retailers.com/news/retailindex.html
December Performance
Retailers reporting increased, decreased or unchanged sales, inventory,
prices, promotions and hiring compared to the same month a year ago
(numbers in parentheses indicate November results)
% Increased % Decreased % No Change Index* Responses
Sales 30 (42) 54 (44) 14 (13) 38.5 (48.1) 120 (106)
Inventory 28 (38) 35 (21) 32 (36) 55.3 (60.8) 117 (102)
Prices 45 (39) 8 ( 3) 43 (55) 66.6 (69.8) 118 (104)
Promotions 38 (47) 6 ( 5) 51 (44) 61.7 (68.6) 117 (103)
Hiring 6 ( 9) 15 ( 9) 68 (78) 40.2 (48.9) 109 (103)
Outlook for Next 3 Months
Retailers expecting increased, decreased or unchanged sales, inventory,
prices, promotions and hiring compared to the same period a year ago
(numbers in parentheses indicate November results)
% Increased % Decreased % No Change Index* Responses
Sales 36 (37) 36 (39) 23 (23) 55.5 (56.0) 117 (106)
Inventory 22 (19) 41 (43) 30 (33) 42.3 (45.4) 114 (102)
Prices 45 (42) 9 ( 6) 38 (47) 65.9 (66.2) 113 (102)
Promotions 33 (36) 9 (13) 51 (44) 63.7 (63.9) 114 (100)
Hiring 5 ( 3) 15 (14) 70 (75) 44.5 (44.1) 111 ( 99)
December Sales Performance & Outlook for Next 3 Months, by Region
(the first number indicates sales performance for the month; the number in
parentheses indicates outlook for the next three months)
% Increased % Decreased % No Change
North 12 (24) 76 (52) 12 (20)
West 52 (38) 33 (24) 10 (33)
Central 24 (35) 35 (24) 41 (35)
East 36 (57) 57 (36) 7 ( 7)
Southeast 33 (37) 57 (42) 10 (18)
Question of the Month
For sales this past holiday season, what was the percentage increase or
decrease from the previous season?
< -5% -5... < 0% 0% 0 > ...+5% > +5%
31.1% 18.0% 16.4% 14.8% 19.7%
For sales for all of 2007, what was the percentage increase or decrease
from the previous year?
< -5% -5... < 0% 0% 0 > ...+5% > +5%
27.3% 24.2% 0% 14.2% 34.3%
*Seasonally adjusted diffusion index. A diffusion index, which is the sum
of the percent of respondents indicating increase and half the percent
indicating no change, is calculated and then seasonally adjusted using the
U.S. Census Bureau's X-11 Seasonal Adjustment procedure. Index values above
50 generally indicate an increase in activity, while values below 50
indicate a decrease.
Contact Information: Contact:
Tom Scott
517.372.5656