SOURCE: Michigan Retailers Association

Michigan Retailers Association

September 01, 2010 14:06 ET

Back-to-School Shopping Receives 'Incomplete'

LANSING, MI--(Marketwire - September 1, 2010) -  Consumers in Michigan and across the nation don't appear to be in any hurry to rev up their back-to-school shopping.

The Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago, shows slower sales for July, the first month of the traditional back-to-school sales period.

Other data for national sales through August show the trend continuing through the season's first two months.

"Michigan retailers expect rising sales in September because of lackluster sales in July and August," said MRA President and CEO, James P. Hallan.

"The slow sales in July and August appear to be the result of a number of factors, including hot weather, a stronger consumer focus on necessities and insufficient job growth."

The Michigan Retail Index survey for July found that 39 percent of retailers increased sales over the same month last year, while 45 percent recorded declines and 16 percent saw no change. The results create a seasonally adjusted performance index of 42.4, down from 46.6 in June. A year ago July, the sales performance index stood at 45.

Index values below 50 generally indicate a decrease in overall retail activity.

Looking ahead, 49 percent of retailers expect sales during the August-October period to improve over the same period last year, while 20 percent project a decrease and 31 percent no change. That puts the seasonally adjusted outlook index at 62.3, up from 60.7 in June. A year ago July, the sales outlook index stood at 52.7.

Retailers in northern Michigan fared the best in July, with 52 percent reporting sales increases and 39 percent reporting declines. Apparel and furniture and appliances sales fared the worst throughout the state.

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
July 2010 results
Index figures dating to July 1994 are available at www.retailers.com/news/retailindex.html

July 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 June results)
  % Increased % Decreased % No Change Index* Responses
Sales 39 (39) 45 (41) 16 (20) 42.4 (46.6) 106 (127)
Inventory 35 (33) 26 (26) 39 (41) 52.1 (52.6) 104 (126)
Prices 28 (24) 11 (10) 61 (66) 59.5 (56.5) 104 (125)
Promotions 32 (36) 4 ( 8) 64 (56) 64.0 (63.8) 104 (124)
Hiring 12 (13) 15 (17) 73 (70) 45.3 (45.1) 101 (126)
 
 
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 June results)      
  % Increased % Decreased % No Change Index* Responses
Sales 49 (46) 20 (22) 31 (32) 62.3 (60.7) 106 (127)
Inventory 37 (34) 17 (21) 46 (45) 55.0 (55.2) 104 (125)
Prices 25 (18) 5 ( 4) 70 (78) 60.2 (55.5) 104 (125)
Promotions 38 (42) 7 ( 6) 55 (52) 67.4 (66.3) 104 (124)
Hiring 11 (10) 10 (14) 79 (76) 49.4 (48.0) 104 (126)
 
 
July 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 52 (57) 39 (26) 9 (17)    
West 31 (48) 55 (28) 14 (24)    
Central 50 (37) 37 (19) 13 (44)    
East 28 (29) 43 (14) 29 (57)    
Southeast 36 (60) 44 (12) 20 (28)    

Question of the Month
Have you already decided who to vote for in the November 2 election for governor?

Yes No
63% 37%

*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.

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