Michigan Posts 'Four-Peat' for Improved Retail Sales

LANSING, MI--(Marketwire - September 23, 2009) - The Michigan Retail Index, an important gauge of the health of Michigan's retail industry, moved higher during August for the fourth consecutive month -- a "Four-peat" -- as retailers' sales and short-term outlook both improved. The Index is a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

"August was slightly better than July and the best month in more than a year," said MRA President and CEO James P. Hallan. "This Four-peat suggests that retail sales hit bottom in early spring."

"While we cheer this long-awaited improvement, we must also caution that a majority of retailers in this state are still hurting. We have a long way to go, but it's heartening that the arrows continue to point in the right direction."

The Michigan Retail Index survey for August found that 35 percent of retailers increased sales over the same month last year, while 53 percent recorded declines and 12 percent saw no change. The results create a seasonally adjusted performance index of 46.6, up from 45.0 in July, 41.2 in June, 35.2 in May and 32.8 in April.

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

Looking ahead, 43 percent of retailers said they expect higher sales during September - November over the same period last year, while 35 percent project a decrease and 22 percent no change. That puts the seasonally adjusted outlook index at 53.5, up from 52.7 in July, 48.7 in June and 45.6 in May.

General merchandise retailers fared the best, as did stores in northern Michigan.

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 2009 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         35 (37)      53 (47)      12 (16)    46.6 (45.0)   130 (107)
Inventory     19 (17)      47 (53)      34 (30)    36.2 (29.4)   129 (107)
Prices        26 (26)      11  (6)      63 (68)    57.5 (59.8)   129 (107)
Promotions    33 (32)       8  (5)      59 (63)    64.6 (63.0)   129 (107)
Hiring        11  (4)      11 (19)      78 (77)    50.7 (40.8)   128 (107)

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         43 (45)      35 (34)      22 (21)    53.5 (52.7)   130 (108)
Inventory     22 (24)      39 (37)      39 (39)    41.9 (39.2)   128 (107)
Prices        25 (26)       7  (6)      68 (68)    60.2 (60.1)   128 (105)
Promotions    50 (40)       3  (5)      47 (55)    71.7 (64.4)   129 (106)
Hiring        10  (7)      13 (15)      77 (78)    47.5 (44.2)   129 (107)

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         40 (20)      47 (50)      13 (30)
West          28 (59)      53 (25)      19 (16)
Central       32 (63)      63 (16)       5 (21)
East          23 (23)      46 (46)      31 (31)
Southeast     39 (50)      57 (29)       4 (21)

Question of the Month
Have major newspapers' home delivery changes caused you to change your
advertising strategies?
Yes, a lot      Yes, a little   No Change
   6.1%            16.8%         77.1%

If you have changed, have you shifted more to:
Internet        Radio           Television      Direct Mail     Billboards
 56.7%          25.0%              15.0%           48.3%           6.7%

(The sum is more than 100% because some companies are doing a combination
of options.)

*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