SOURCE: Michigan Retailers Association

February 28, 2007 09:05 ET

Michigan Retailers Project Better '07 Sales

LANSING, MI -- (MARKET WIRE) -- February 28, 2007 -- Michigan retailers are forecasting improved 2007 sales, but see continued challenges throughout late winter and early spring.

According to the Michigan Retail Index monthly survey, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago, 57 percent expect to boost annual sales over last year's, with more than 30 percent saying gains will top 5 percent.

Retailers' three-month outlook, however, fell more than five points on the Index, to the lowest level of optimism since last August.

"January sales showed some improvement as the holiday shopping season extended into the new year, boosting confidence in the year ahead," said Larry Meyer, MRA chairman and CEO. "But that optimism didn't necessarily extend to the next few months. Retailers believe the challenges facing our state will continue and be especially tough through early spring."

The Index showed 36 percent of retailers increased sales in January over the same month last year, while 37 percent recorded declines and 22 percent saw no change. The results create a seasonally adjusted performance index of 50.4, up from 48 in December.

In addition, 45 percent believe their sales will increase for February-April, while 22 percent forecast declines and 27 percent project no change. The results create a seasonally adjusted outlook index of 56.8, down from 62.2 in December.

West Michigan retailers fared the best in January, with 40 percent ringing up better sales. Furniture and appliance stores led the field, with 54 percent reporting sales gains.

The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation's largest state trade association of general merchandise retailers.

Note: William Strauss, Senior Economist and Economic Advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.

Michigan Retailers Association/Federal Reserve Bank of Chicago

Michigan Retail Index

January 2007 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        36 (39)      37 (47)      22 (14)      50.4 (48.0)  207 (207)
Inventory    25 (30)      32 (36)      31 (34)      45.7 (58.6)  193 (199)
Prices       32 (41)       8 ( 8)      50 (51)      56.3 (64.7)  197 (200)
Promotions   32 (37)      10 (11)      47 (52)      57.0 (62.7)  194 (201)
Hiring        9 ( 9)      17 (16)      62 (75)      40.5 (47.4)  191 (195)
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        45 (43)      22 (30)      27 (27)      56.8 (62.2)  204 (204)
Inventory    29 (24)      25 (32)      35 (44)      42.1 (49.9)  194 (199)
Prices       29 (37)       6 ( 9)      55 (54)      55.7 (65.2)  197 (200)
Promotions   41 (39)       6 (13)      42 (48)      60.0 (67.6)  194 (201)
Hiring       15 ( 9)      11 (13)      61 (78)      43.7 (51.9)  189 (197)
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           39 (45)         34 (21)         24 (31)
West            40 (48)         27 (15)         21 (23)
Central         36 (51)         31 (21)         33 (28)
East            19 (19)         56 (31)         25 (37)
Southeast       31 (44)         49 (28)         18 (26)
Question of the Month

What is your current projection for your sales growth in 2007? (Percentages for actual 2006 growth in parentheses.)

< -5%          -5... < 0%     0%             0 > ...5%      > 5%
10.6% (29.9)   11.1% (15.2)   12.4% (7.1)    26.3% (24.4)   30.4% (23.4)

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