Mixed holiday sales point to slower ’09 start

Two of every five Michigan retailers expect their 1st Quarter sales to be the same or better than last year, following a holiday shopping season of mixed results.

According to the latest Michigan Retail Index survey, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve

Bank of Chicago, 20 percent expect to increase sales compared to the same period last year, 21 expect no change and 59 percent expect sales to decline.

For the holidays, a better than expected 44.6 percent posted sales gains, most of those above a 5-percent increase. However, a slightly larger group — 47.6 percent — suffered sales decreases, most of those greater than 5 percent.

“Considering all the economic hurdles retailers were facing, it’s a pleasant surprise that so many were able to ring up higher sales,” said James P. Hallan, MRA president and CEO. “However, no one is losing sight of the fact that most retailers posted significant losses or no gains.”

Across the country, the National Retail Federation said overall holiday sales declined 2.8 percent. The U.S. Commerce Department pegged the decrease at 2.7 percent.

The Michigan Retail Index survey for December found that 23 percent of retailers increased sales over the same month last year, while 66 percent recorded declines and 11 percent saw no change. The results create a seasonally adjusted performance index of 30.4, up from 28.8 in November and the second worst month of the year.

Looking ahead, 20 percent of retailers said they expect higher sales during January – March over the same period last year, while 59 percent project a decrease and 21 percent no change. That puts the seasonally adjusted outlook index at 36.6, up from 34.1 in November and also the year’s second worst month.

Michigan sales tax revenue totaled $651.6 million in December, a 4.8-percent increase from the year-ago level. December sales tax collections increased because November ended on a weekend, which pushed Thanksgiving weekend sales tax collections into December. Otherwise, December would have been down an estimated 1.7 percent.

On a fiscal year-to-date basis, total sales tax receipts are down 4.2 percent.

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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