Mixed results for Michigan holiday shopping

LANSING, MI--(Marketwired - January 25, 2017) - Weaker than expected December sales undercut November gains, producing mixed holiday season results for Michigan's retail industry. That's according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

"Holiday sales were uneven. For every five retailers, roughly two increased sales, two experienced decreases and one matched last year's," said MRA President and CEO James P. Hallan.

Retailers' holiday sales declined an average 0.2 percent from the 2015 holiday season. Forty percent of retailers registered gains, 42 percent declines and 18 percent said sales were flat.

Going into the season, 63 percent of MRA members projected their sales would increase, while only 9 percent expected them to slip. Their forecasts averaged +2.1 percent.

However, year-over-year sales for all of 2016 were positive. They rose an average 0.5 percent, with 51 percent of retailers growing sales and 37 percent experiencing decreases.

The Michigan Retail Index survey for December alone found 39 percent of retailers increased sales over the same month last year, while 41 percent recorded declines and 20 percent reported no change. The results create a seasonally adjusted performance index of 52.0, down from 55.7 in November. A year ago December the performance index stood at 48.7.

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, 36 percent of retailers expect sales during First Quarter 2017 to increase over the same period last year, while 20 percent project a decrease and 44 percent no change. That puts the seasonally adjusted outlook index at 65.3, down from 83.5 in November. A year ago December, the outlook index stood at 71.

Across the nation, retail sales excluding autos and gasoline were flat for December, the U.S. Commerce Department reported.

Independently, National Retail Federation economists said U.S. holiday sales increased 4 percent over last year.

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

December 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 November results)

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 November results)

November 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)

Question of the Month
How much did your 2016 holiday sales increase or decrease over last year?

How much did your total 2016 sales increase or decrease over last year?

*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.