July 25, 2001

Few retailers plan tax-rebate promotions

LANSING - Although several major retail chains have launched special promotions in an effort to capture consumers’ tax-rebate dollars, a majority of Michigan retailers say they will avoid the hype.

Just 3 percent of retailers surveyed say they plan special advertising or sales promotions to capitalize on federal income tax rebates, according to the June Michigan Retail Index, a joint project of the Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago. The vast majority, 81 percent, say they’re not planning special promotions, while 16 percent are undecided.

"Now that large retail chains have announced specials tied to the tax rebates, it’s likely that smaller retailers will begin jumping on the bandwagon," said Larry Meyer, MRA’s CEO and a former director of the Michigan Department of Commerce. "Consumers are expected to spend much of their rebate checks, and small stores don’t want to miss out on the windfall."

The Index also revealed that performance of Michigan’s retail industry remains sluggish. In June, 37 percent of retailers reported increased year-to-year sales, down from 40 percent in May. Expectations for the next three months rose, however, for the third consecutive month. Fifty-six (56) percent of respondents expect 3rd Quarter sales to top last year’s.

Jewelers fared the best across the industry, with 48 percent reporting better sales than last year.

The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation’s largest state trade association of general merchandise retailers. MRA’s more than 5,500 retail business members operate more than 12,000 stores across the state.

Note: William Strauss, Senior Economist and Economic Advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.

Michigan Retail Index
June 2001 results

June Activity
(numbers in parentheses indicate May results)

Expectations for Next 3 Months
(numbers in parentheses indicate May results)

June Sales Activity & Expectations for Next Three Months, by Region
(numbers in parentheses indicate expectations for next three months)