SOURCE: Michigan Retailers Association

Michigan Retailers Association

February 25, 2010 12:25 ET

Michigan Retailers Off to Better Start in 2010

LANSING, MI--(Marketwire - February 25, 2010) - Michigan retailers began 2010 with an upswing in sales and confidence, according to the latest Michigan Retail Index survey, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The survey found that more than 40 percent of retailers increased sales in January, the highest level since November 2007. In addition, 49 percent project better sales for the rest of the winter and early spring, the best since March 2008.

However, the number of retailers posting year-over-year sales decreases in January, 47 percent, outnumbered those ringing up increases, 42 percent, for the 27th consecutive month.

"Michigan's retail industry has posted better sales numbers three months in a row and shown solid improvement since its low point last winter and spring," said MRA President and CEO James P. Hallan.

"We expect this trend to continue as the economy begins to slowly create more jobs and chip away at double-digit unemployment, currently the biggest problem affecting consumer spending."

The Michigan Retail Index survey for January found that 42 percent of retailers increased sales over the same month last year, while 47 percent recorded declines and 11 percent saw no change. The results create a seasonally adjusted performance index of 49.9, up from 47.8 in December. A year ago, the index had dropped to 29.0 in January.

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

Looking ahead, 49 percent of retailers expect sales during February - April to improve over the same period last year, while 29 percent project a decrease and 22 percent no change. That puts the seasonally adjusted outlook index at 61.8, up from 57.1 in December. A year ago the index had fallen to 41.6 in January.

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

January 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 December results)

            % Increased  % Decreased  % No Change  Index*       Responses
Sales       42 (40)      47 (44)      11 (16)      49.9 (47.8)  135 (136)
Inventory   14 (16)      47 (52)      39 (32)      39.2 (31.6)  135 (136)
Prices      22 (21)      10 (12)      68 (67)      56.2 (54.4)  134 (135)
Promotions  32 (47)      10 ( 5)      58 (48)      64.0 (71.1)  135 (135)
Hiring       9 ( 5)      19 (17)      72 (78)      50.4 (44.1)  135 (136)

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 December results)

            % Increased  % Decreased  % No Change  Index*       Responses
Sales       49 (42)      29 (28)      22 (30)      61.8 (57.1)  135 (134)
Inventory   28 (25)      25 (29)      47 (46)      53.2 (48.1)  135 (135)
Prices      21 (33)       5 ( 9)      74 (58)      59.9 (61.9)  135 (135)
Promotions  38 (39)       6 ( 5)      56 (56)      67.5 (67.4)  135 (135)
Hiring      10 ( 8)      11 (14)      79 (78)      51.6 (47.0)  133 (134)

January 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       27 (47)      63 (33)      10 (20)
West        47 (56)      47 (19)       6 (25)
Central     43 (52)      38 (29)      19 (19)
East        82 (73)      18 ( 9)       0 (18)
Southeast   40 (47)      53 (40)       7 (13)

Question of the Month
What is your current projection for your sales growth in 2010?

Negative        Zero            0-10%           More than 10%
13%             25%             48%             14%

*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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