Retailers expect improvement in 2nd Quarter

Michigan retailers’ projections are rising for 2nd Quarter sales despite falling sales numbers in March.

The Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago, shows the industry’s short-term outlook climbing to the highest level in five months, while March sales performance fell to its lowest level in five years.

“The arrival this month of millions of dollars in federal income tax rebates is, no doubt, fueling the short-term optimism,” said James P. Hallan, MRA president and CEO. “It’s a small but welcome shot in the arm for an industry and an economy struggling in the face of higher gasoline prices, home foreclosures and other economic problems.”

The February Index survey had found that most retailers believe the “economic stimulus” checks will be of modest help to their businesses.

For March, the Index showed 28 percent of retailers increased sales over the same month last year, while 54 percent recorded declines and 18 percent saw no change. The results create a seasonally adjusted performance index of 35.6, down from 42.2 in February and the lowest for any month since February 2003. A year ago March, the index was at 49.0.

Looking ahead, 54 percent believe their sales will increase for April–June, while 25 percent forecast declines and 21 percent project no change. The results create a seasonally adjusted outlook index of 59.6, the highest since last October. A year ago March, the index was at 57.1.

Sales tax receipts in March totaled $524.2 million, representing an 11.7-percent increase from the year-ago level.

Most of this increase was due to a noneconomic timing factor that is likely to be offset by lower-than-normal collections in April. Adjusting for this factor, sales tax collections were up about 2 percent in March. Higher prices for gasoline and food also contributed to the increase.

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.

Return to May Michigan Retailer page one • MRA home