SOURCE: Michigan Retailers Association

Michigan Retailers Association

November 23, 2016 10:04 ET

Holiday shopping shifts into high gear; Buy Nearby shoppers help local, state economies

LANSING, MI--(Marketwired - November 23, 2016) - Holiday shoppers in Michigan this Thanksgiving weekend will quickly get into the thick of what retailers expect to be a positive holiday season.

Nearly two-thirds (63 percent) of Michigan Retailers Association (MRA) members project their sales to increase over last year's, while only 9 percent expect them to slip. Their forecasts average +2.1 percent, up slightly over last year's projection of +2.0 percent.

Twenty-one percent this year expect to increase sales more than 5 percent.

Michigan retail sales for the season could account for nearly $20 billion of the nation's estimated $655 billion holiday spending.

The performance of the state's retail industry was off slightly during October, but didn't reduce retailers' expectations for the holidays, according to the latest Michigan Retail Index survey. The Index is a joint project of MRA and the Federal Reserve Bank of Chicago.

"All signs point to a positive holiday season, including more Michiganders working this year and consistently low gasoline prices," said MRA President and CEO James P. Hallan.

"More than half of holiday shoppers already have started making purchases, and most plan to be out and about during this extended weekend -- the busiest of the year."

Hallan also urged holiday shoppers to "Buy Nearby" at stores and websites that have invested in Michigan by building stores or Internet sites here, creating jobs and supporting their local communities and the state's economy.

"Before making purchases, shoppers should think about where their shopping dollars are going," he said. "If they shop in Michigan, they are helping their families, neighbors, local communities and their state. If they send those dollars out of the state to an online, remote seller with no connection to Michigan, they're not."

MRA's year-round Buy Nearby campaign encourages consumers to buy from retailers that are invested in Michigan. Research shows Michigan's economy would create 75,000 new jobs and add $9 billion in economic activity if everyone practiced Buy Nearby.

The October Michigan Retail Index survey found 40 percent of Michigan retailers increased sales over the same month last year, while 40 percent recorded declines and 20 percent reported no change. The results create a seasonally adjusted performance index of 49.8, down from 56.9 in September. A year ago October the performance index stood at 54.1.

The 100-point index gauges the performance of the state's overall retail industry, based on monthly surveys conducted by MRA and the Federal Reserve Bank of Chicago's Detroit branch. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.

Looking forward, 55 percent of retailers expect sales during November-January to increase over the same period last year, while 20 percent project a decrease and 25 percent no change. That puts the seasonally adjusted outlook index at 72.6, up from 65.5 in September. A year ago October, the outlook index stood at 66.6.

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
October 2016 results
Previous Index figures are available at https://www.retailers.com/news-events/michigan-retail-index/

 
October 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 September results)
 % Increased% Decreased% No ChangeIndex*Responses
Sales40 (45)40 (32)20 (23)49.8 (56.9)68 (73)
Inventory24 (38)29 (22)47 (40)44.7 (56.0)68 (73)
Prices9 (11)10 ( 6)81 (83)50.6 (52.6)68 (72)
Promotions16 (22)14 ( 6)70 (72)51.5 (59.1)67 (72)
Hiring11 (15)16 (13)73 (72)47.6 (48.0)67 (71)
      
      
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 September results)
 % Increased% Decreased% No ChangeIndex*Responses
Sales55 (54)20 (17)25 (29)72.6 (65.5)67 (72)
Inventory26 (33)29 (37)45 (30)58.5 (48.3)66 (73)
Prices15 ( 9)3 (3)82 (88)56.5 (53.8)67 (73)
Promotions42 (36)6 (4)52 (60)65.6 (63.4)67 (73)
Hiring15 (21)9 (12)76 (67)55.5 (53.9)67 (73)
    
    
October 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
North62 (38)19 (37)19 (25)
West35 (60)25 (10)40 (30)
Central50 (60)40 ( 0)10 (40)
East100 (50)0 ( 0)0 (50)
Southeast36 (58)44 (17)20 (25)
 
 
Question of the Month
Compared to last year, when did you start (or plan to start) your holiday promotions?
Much EarlierEarlierSameLaterMuch Later
0%9%89%2%0%

*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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