Apr 27 - Gas prices, weather hit retail salesLANSING — Michigan retailers are worried about rising gasoline prices. Sharply higher pump prices, together with cool weather and a late Easter, drove down March sales and future sales projections, according to the latest Michigan Retail Index survey conducted by Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.
The retail industry’s March sales performance dipped to its lowest level since last July and its optimism slipped to the lowest since last September.
“With gasoline prices more than $1 per gallon higher than last year, it should come as no surprise that retailers are concerned,” said James P. Hallan, MRA president and chief executive officer. “In fact, rising prices at the pump did cut into March sales.”
MRA members’ comments from the survey included: “Gasoline prices are hitting that uncomfortable mark [again],” and, “The high price of gas and diesel is putting brakes on this recovery.”
Other comments ranged from, “The weather so far has not been too cooperative,” to “Weather really hurt, and late Easter also hurt March sales.”
The Michigan Retail Index for March found that 32 percent of retailers increased sales over the same month last year, while 39 percent recorded declines and 29 percent saw no change. The results create a seasonally adjusted performance index of 42.9, down from 55.2 in February and 53.3 in January.
Index values below 50 generally indicate a decrease in overall retail activity.
Looking forward, 54 percent of retailers expect sales during the 2nd Quarter to increase over the same period last year, while 14 percent project a decrease and 32 percent no change. That puts the seasonally adjusted outlook index at 63.8, down from 72.3 in both February and January.
Note: William Strauss, Senior Economist and Economic Advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.