More Retailers Forecasting Better Sales

LANSING, MI--(Marketwire - May 27, 2009) - If only current sales matched retailers' rising projections.

Michigan retailers' short-term forecasts rose in April for the fifth month in a row, but the number of retailers posting better sales fell for the second consecutive month, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

"Retailers know there is a lot of pent-up consumer demand out there, which could be a big part of the industry's brightened outlook," said James P. Hallan, MRA president and CEO. "There's also a feeling that the overall economy is stabilizing and could lead to improved sales in the near future."

"However, April's numbers serve as a strong reminder that many economic problems persist, consumers are hesitant and that we still have a long way to go," he added.

Nationally, retail sales also fell in April for the second consecutive month, according to the U.S. Commerce Department.

The Michigan Retail Index survey for April found that 27 percent of retailers increased sales over the same month last year, while 58 percent recorded declines and 15 percent saw no change. The results create a seasonally adjusted performance index of 32.8, down from 39.4 in March and 40.8 in February.

Index values above 50 generally indicate an increase in positive activity, while values below 50 indicate a decrease.

Looking ahead, 39 percent of retailers said they expect higher sales during May - July over the same period last year, while 34 percent project a decrease and 27 percent no change. That puts the seasonally adjusted outlook index at 52.2, up from 47.8 in March, 44.6 in February and 41.6 in January. It was the most positive outlook since 53.4 last August.

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 2009 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       27 (31)      58 (55)      15 (14)      32.8 (39.4)  119 (135)
Inventory   17 (14)      41 (51)      42 (35)      36.8 (30.0)  117 (134)
Prices      22 (29)      10 (16)      68 (55)      54.1 (56.7)  118 (135)
Promotions  39 (36)       5 (10)      56 (54)      64.9 (62.9)  118 (135)
Hiring       8 ( 8)      21 (24)      71 (68)      44.1 (42.6)  116 (132)


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 (39)      34 (36)      27 (25)      52.2 (47.8)  119 (136)
Inventory   21 (23)      34 (39)      45 (38)      43.3 (39.0)  116 (133)
Prices      26 (29)       7 ( 8)      67 (63)      60.2 (59.0)  118 (133)
Promotions  48 (45)       3 ( 8)      49 (47)      75.0 (65.9)  118 (135)
Hiring      15 ( 7)      15 (19)      70 (74)      49.1 (41.8)  118 (133)


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       27 (37)      55 (36)      18 (27)
West        19 (56)      62 (28)      19 (16)
Central     25 (38)      62 (31)      13 (31)
East        63 (25)      37 (25)       0 (50)
Southeast   24 (30)      60 (40)      16 (30)

*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