SOURCE: Michigan Retailers Association

Michigan Retailers Association

November 26, 2014 15:26 ET

Michigan Retailers Association: Green Flag Is out for Holiday Shopping

LANSING, MI--(Marketwired - Nov 26, 2014) - Conditions are good for the official start of the holiday shopping season (regardless of whether it begins on Thanksgiving or the day after): brisk weather, lower gasoline prices, reduced unemployment and optimistic retailers offering big bargains.

Nearly two-thirds (63 percent) of Michigan retailers are forecasting better holiday sales over last year, and almost a third (28 percent) expect their sales will climb more than 5 percent, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The latest Michigan Retail Index found continued positive sales activity during October (50.3 on the 100-point index), although lower than September's level (62.1). The Index continued its up-and-down pattern since the summer.

MRA President and CEO James P. Hallan said signs look good for a stronger holiday season over last year, when severe weather wiped out the final days in several areas.

"The economic conditions are in place for a better season, especially more people working and lower gas prices," said Hallan. "Consumers appear more ready to spend, although some will need the type of compelling reason -- big bargains -- retailers offer this time of year."

The October monthly survey of MRA members showed 41 percent of retailers increased sales over the same month last year, while 39 percent recorded declines and 20 percent reported no change. The results create a seasonally adjusted performance index of 50.3, down from 62.1 in September. A year ago October the Index stood at 54.8.

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. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.

Looking forward, 51 percent of retailers expect sales during November-January to increase over the same period last year, while 20 percent project a decrease and 29 percent no change. That puts the seasonally adjusted outlook index at 67.5, down from 73.6 in September. A year ago October the Index stood at 64.3.

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 2014 results
Index figures dating to July 1994 are available at http://www.retailers.com/mra/news/michigan-retail-index.html

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 Change   Index*   Responses
Sales   41 (53)   39 (35)   20 (12)   50.3 (62.1)   69 (103)
Inventory   36 (31)   23 (27)   41 (42)   53.9 (48.5)   69 (103)
Prices   4 (25)   10 ( 3)   86 (72)   46.8 (60.4)   69 (103)
Promotions   32 (28)   3 ( 9)   65 (63)   63.8 (59.0)   68 (102)
Hiring   13 (25)   10 ( 8)   77 (67)   51.0 (57.2)   68 (102)
                     

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 Change   Index*   Responses
Sales   51 (60)   20 (18)   29 (22)   67.5 (73.6)   66 (105)
Inventory   28 (29)   34 (24)   38 (47)   52.8 (55.6)   65 (105)
Prices   15 (22)   16 ( 6)   69 (72)   49.1 (58.4)   67 (103)
Promotions   47 (48)   3 ( 4)   50 (48)   70.3 (71.0)   68 (105)
Hiring   18 (20)   10 (12)   72 (68)   54.9 (54.9)   67 (104)
                     

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
North   31 (33)   54 (8)   15 (59)
West   33 (41)   39 (24)   28 (35)
Central   37 (75)   50 (12)   13 (13)
East   50 (0)   50 (50)   0 (50)
Southeast   45 (67)   32 (24)   23 (9)
             

Question of the Month
Compared to last year, how many seasonal workers do you expect to hire for the holiday season?

Significantly   Somewhat   Slightly   No Change   Slightly   Somewhat   Significantly
More   More   More       Fewer   Fewer   Fewer
0%   3%   11%   77%   3%   3%   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.

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