Michigan Retailers Raise Outlook for Fall

LANSING, MI--(Marketwire - September 24, 2008) - More Michigan retailers expect to increase sales this fall, despite a drop in sales in August, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

Forty percent of retailers expect higher sales during September-November over the same period last year, the monthly poll of MRA members found. That's 5 percent more than were forecasting three-month sales gains a month earlier.

"There's no single reason for the uptick in optimism," said James P. Hallan, MRA president and CEO. "But it appears there's anticipation of an early start to the shortened holiday shopping season and a sense of pent-up demand among consumers."

"We also know that retailers continue to work hard at maintaining and boosting sales during these difficult economic times. For example, nearly half have told us they have added or expanded lines of less expensive merchandise to appeal to financially strapped customers," he added.

The August Index showed 32 percent of retailers increased sales over the same month last year, while 52 percent recorded declines and 16 percent saw no change. The results create a seasonally adjusted performance index of 40.0, down from 48.1 in July. August was the 10th consecutive month that the number of retailers reporting decreased sales has outnumbered those reporting increases.

Looking forward, 40 percent believe their sales will increase for September-November, while 32 percent forecast declines and 28 percent project no change. The results create a seasonally adjusted outlook index of 53.4, up from 48.5 in July and 47.9 in June.

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

August 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 July results)
          % Increased   % Decreased   % No Change     Index*      Responses
Sales        32 (38)       52 (45)       16 (17)    40.0 (48.1)   150 (131)
Inventory    33 (22)       36 (41)       31 (37)    44.7 (42.8)   149 (131)
Prices       53 (50)        7 ( 9)       40 (41)    73.4 (71.8)   149 (130)
Promotions   38 (34)        9 (10)       53 (56)    64.8 (63.8)   149 (129)
Hiring       10 (10)       21 (25)       69 (65)    44.5 (42.8)   148 (127)


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 July results)
          % Increased   % Decreased   % No Change     Index*      Responses
Sales        40 (35)       32 (39)       28 (26)    53.4 (48.5)   151 (132)
Inventory    34 (21)       34 (40)       32 (39)    45.5 (39.4)   149 (132)
Prices       46 (44)        5 ( 5)       49 (51)    71.4 (69.6)   150 (132)
Promotions   57 (37)        2 (10)       41 (53)    73.5 (64.1)   150 (131)
Hiring       12 ( 6)       14 (17)       74 (77)    47.8 (45.7)   148 (129)


August 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           33 (37)         52 (41)         15 (22)
West            37 (44)         46 (22)         17 (34)
Central         33 (52)         54 (24)         13 (24)
East            33 (56)         56 (22)         11 (22)
Southeast       22 (35)         59 (38)         19 (27)


Question of the Month
To try to maintain sales, have you added or increased the amount of
merchandise with a lower price point?
Yes             No
44.7%           55.3%

*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