SOURCE: Michigan Retailers Association

Michigan Retailers Association

January 25, 2012 14:06 ET

Holiday Sales Better for Most Michigan Retailers

LANSING, MI--(Marketwire - Jan 25, 2012) - Two-thirds of Michigan retailers rang up better holiday sales, with most retailers boosting sales by more than 5 percent, according to the latest Michigan Retail Index, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.

"It was a good holiday season, and the second consecutive year of positive holiday results," said MRA President and CEO James P. Hallan. "Sales were strongest early in the season and remained positive throughout -- we would have been surprised if the final numbers had been different than they turned out."

Michigan retailers went into the season more bullish than national forecasts. On average, the state's retailers projected a 6 percent gain over the previous year. While the final average was a 4 percent gain, 53 percent of retailers improved sales by more than 5 percent, and 13 percent by 0.1 to 5 percent.

Nationally, the U.S. Commerce Department said sales rose by 0.4 percent in November and 0.1 in December. The National Retail Federation said a narrower category it defined as "holiday sales" grew by 4.1 percent.

The Michigan Retail Index for December found that 43 percent of retailers increased sales over the same month last year, while 35 percent recorded declines and 22 percent saw no change. The results create a seasonally adjusted performance index of 59.1, down from 63.2 in November but up from 58.3 in October.

The Index gauges the performance of the state's overall retail industry, based on monthly surveys conducted by MRA and the Federal Reserve. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.

Looking forward, 46 percent of retailers expect sales during January-March to increase over the same period last year, while 18 percent project a decrease and 36 percent no change. That puts the seasonally adjusted outlook index at 71.8, down from 75.8 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 Retail Index
December 2011 results
Index figures dating to July 1994 are available at http://www.retailers.com/mra/news/michigan-retail-index.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 43 (49) 35 (31) 22 (20) 59.1 (63.2) 125 (102)
Inventory 25 (35) 28 (22) 47 (43) 57.1 (53.4) 123 (101)
Prices 27 (28) 10 (9) 63 (63) 60.2 (60.1) 123 (101)
Promotions 28 (36) 4 (4) 68 (60) 60.3 (60.2) 123 (101)
Hiring 6 (11) 8 (6) 86 (83) 51.1 (56.1) 123 (100)

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 46 (45) 18 (18) 36 (37) 71.8 (75.8) 125 (100)
Inventory 21 (24) 24 (27) 55 (49) 58.3 (59.5) 121 (100)
Prices 30 (30) 5 (8) 65 (62) 61.5 (61.8) 121 (99)
Promotions 31 (23) 3 (7) 66 (70) 67.2 (60.4) 121 (99)
Hiring 7 (7) 5 (8) 88 (85) 54.9 (54.3) 119 (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 34 (34) 38 (14) 28 (52)
West 35 (55) 34 (17) 31 (28)
Central 50 (46) 33 (0) 17 (54)
East 30 (0) 70 (60) 0 (40)
Southeast 65 (69) 23 (15) 12 (16)

Question of the Month
What was your percentage sales increase or decrease, compared to last year, for the 2011 holiday season?
Average +4%

Increase more than 5% 53% No change 9% Decrease 5% or less 5%
Increase 5% or less 13% Decrease more than 5% 21%

*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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