Michigan Retailers Lower Sales Expectations

LANSING, MI--(Marketwire - May 28, 2008) - More Michigan retailers rang up better sales in April, but not enough to keep the industry's short-term sales projections from falling, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The number of retailers posting year-over-year gains rose in April after a significant drop in March. But gainers were outnumbered -- for the sixth consecutive month -- by those whose sales declined. Looking ahead, fewer retailers predict improved sales for the next three months.

"Retailers have been looking forward to the economic stimulus program that has started putting $3.8 billion into Michigan," said James P. Hallan, MRA president and CEO. "But not even that injection of money is pushing up expectations weighted down by skyrocketing gasoline prices, real estate woes and other dismal economic news. April was a reversal of March -- when sales were down but expectations rose because of the stimulus checks."

For April, the Index showed 36 percent of retailers increased sales over the same month last year, while 45 percent recorded declines and 19 percent saw no change. The results create a seasonally adjusted performance index of 43.3, up from 35.6 in March and the highest since January. A year ago April, the index was at 39.7.

Looking forward, 39 percent believe their sales will increase for May-July, while 37 percent forecast declines and 24 percent project no change. The results create a seasonally adjusted outlook index of 49.0, down from 59.6 in March and the worst since the Index was established in 1994. A year ago April, the index was at 49.8.

The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation's largest state trade association of general merchandise retailers.

Note: William Strauss, Senior Economist and Economic Advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.

Michigan Retail Index
April 2008 results
Index figures dating to July 1994 are available at
www.retailers.com/news/retailindex.html

April 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 March results)

           % Increased  % Decreased  % No Change    Index*       Responses
Sales         36 (28)      45 (54)      19 (18)   43.3 (35.6)    108 (114)
Inventory     35 (28)      37 (32)      28 (40)   46.4 (44.6)    107 (113)
Prices        55 (52)       5  (8)      40 (40)   73.8 (72.2)    107 (113)
Promotions    37 (35)       9 (11)      54 (54)   62.0 (61.8)    105 (114)
Hiring         7  (7)      19 (20)      74 (73)   44.3 (43.3)    106 (112)


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 March results)

           % Increased  % Decreased  % No Change    Index*       Responses
Sales         39 (54)      37 (25)      24 (21)   49.0 (59.6)    108 (113)
Inventory     21 (27)      37 (33)      42 (40)   40.1 (43.9)    107 (113)
Prices        46 (46)       4  (4)      50 (50)   71.8 (67.4)    107 (112)
Promotions    38 (44)       4  (5)      58 (51)   69.5 (67.7)    106 (111)
Hiring         8 (13)      12 (13)      80 (74)   46.6 (47.7)    105 (113)


April 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         17 (38)      54 (37)      29 (25)
West          36 (36)      55 (32)       9 (32)
Central       46 (39)      39 (38)      15 (23)
East          27 (36)      46 (27)      27 (37)
Southeast     49 (43)      35 (41)      16 (16)

*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