Michigan Retailers Association today reports that March 2024 sales again performed moderately, landing at 44.3 on the 100-point Retail Index. The January and February 2024 Retail Indexes came in at 48.0, indicating a potentially stagnating retail economy.
The 100-point Index provides a snapshot of the state’s overall retail industry. Index values above 50 generally indicate positive activity, the higher the number, the stronger the activity. The seasonally adjusted performance Index is conducted by Michigan Retailers Association (MRA) in cooperation with the Federal Reserve Bank of Chicago’s Detroit branch.
Thirty-eight percent noted an increase over February sales, forty-five percent of Michigan retailers surveyed reported a sales decrease and seventeen percent reported no change.
“The stagnation of first-quarter sales remind us that adaptability and strategic foresight are our greatest assets. It’s not about the setback, but rather the opportunity to reassess, innovate, and emerge stronger in the quarters ahead,” said William J. Hallan, President and CEO of the Michigan Retailers Association. “Michigan shoppers can make small changes to improve the way our small businesses fare going forward – they can switch just one in 10 of their purchases to a local business and improve their local economy.”
Cost of products continues to dog most retailers – with a majority of survey respondents indicating that material price increases are impacting their business. Nationally, the inflation rate was 3.5% for the 12 months ending March, compared to the previous rate of 3.2%, according to the U.S. Labor Department data published on April 10, 2024.
Second to price of product, the greatest cost concern is with freight costs. This is two-fold, impacting retailers at the points of both sending and receiving products.
Three-Month Optimism Falters
When asked to predict their 3-month sales outlook, sixty-two percent (62%) of retailers predicted their sales will continue to rise through June, and thirteen percent (13%) said they expect their sales to decline. Twenty-five percent (25%) anticipate no change. That results in a 63.7 Index rating, a decrease from last month’s prediction Index rating of 67.3 – another prediction of flattening summer sales in Michigan.
Credit Card Use
Retailers were asked as part of the Index the percentage of sales transactions conducted by credit card. A majority of respondents indicated that levels stayed the same year-over-year – 26% reported higher use of credit cards with 60% reporting similar, and 13% reporting lower use.
Unemployment Rates
The national unemployment rate dipped to 3.8% over February (3.9%). Last year, the national unemployment rate was 3.5%. The unemployment rate for Michigan has not been announced for March. Last year, the rate came in at 3.7%.
