For Immediate Release

September 24, 2008

LANSING — More Michigan retailers expect to increase sales this fall, despite a drop in sales in August, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

Forty percent of retailers expect higher sales during September – November over the same period last year, the monthly poll of MRA members found. That’s 5 percent more than were forecasting three-month sales gains a month earlier.

“There’s no single reason for the uptick in optimism,” said James P. Hallan, MRA president and CEO. “But it appears there’s anticipation of an early start to the shortened holiday shopping season and a sense of pent-up demand among consumers.”

“We also know that retailers continue to work hard at maintaining and boosting sales during these difficult economic times. For example, nearly half have told us they have added or expanded lines of less expensive merchandise to appeal to financially strapped customers,” he added.

The August Index showed 32 percent of retailers increased sales over the same month last year, while 52 percent recorded declines and 16 percent saw no change. The results create a seasonally adjusted performance index of 40.0, down from 48.1 in July. August was the 10th consecutive month that the number of retailers reporting decreased sales has outnumbered those reporting increases.

Looking forward, 40 percent believe their sales will increase for September–November, while 32 percent forecast declines and 28 percent project no change. The results create a seasonally adjusted outlook index of 53.4, up from 48.5 in July and 47.9 in June.

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