Michigan Retailers lower sales expectations

More Michigan retailers rang up better sales in April, but not enough to keep the industry’s short-term sales projections from falling, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The number of retailers posting year-over-year gains rose in April after a significant drop in March. But gainers were outnumbered—for the sixth consecutive month—by those whose sales declined. Looking ahead, fewer retailers predict improved sales for the next three months.

“Retailers have been looking forward to the economic stimulus program that has started putting $3.8 billion into Michigan,” said James P. Hallan, MRA president and CEO.

“But not even that injection of money is pushing up expectations weighted down by skyrocketing gasoline prices, real estate woes and other dismal economic news. April was a reversal of March—when sales were down but expectations rose because of the stimulus checks.”

For April, the Index showed 36 percent of retailers increased sales over the same month last year, while 45 percent recorded declines and 19 percent saw no change. The results create a seasonally adjusted performance index of 43.3, up from 35.6 in March and the highest since January. A year ago April, the index was at 39.7.

Looking forward, 39 percent believe their sales will increase for May–July, while 37 percent forecast declines and 24 percent project no change. The results create a seasonally adjusted outlook index of 49.0, down from 59.6 in March and the worst since the Index was established in 1994. A year ago April, the index was at 49.8.

Sales tax receipts in April totaled $526.9 million, which was down 8.5 percent from last year’s level. All of this decline can be attributed to timing factors, according to the Senate Fiscal Agency.

So far in FY 2007-08, sales tax revenue is up 2.3 percent, which is about $80.0 million above the January consensus estimate.

Complete results of this month’s Michigan Retail Index—including data on sales, inventory, prices, promotions and hiring—are available at www.retailers.com/news/retailindex.html. The website includes figures dating back to July 1994.

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