For Immediate Release
August 28, 2002

LANSING — Michigan retailers are lowering expectations for back-to-school and fall sales, according to the Michigan Retail Index, a joint project of the Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

Fifty-nine percent project August-October sales will increase over the same period last year. When combined with the 22 percent who project level sales and the 19 percent who predict a falloff, the results create a seasonally adjusted outlook index of 66.2—down from 70.9 in June and the lowest level of optimism since November 2001.

The survey of MRA members also found that nearly one-third are being more cautious approaching the upcoming holiday shopping season. Asked how their ordering plans for the season compare to last year, 17 percent said they had increased them, 32 percent said they had decreased them and 51 percent reported no change.

Actual sales performance in July increased from June, however. Forty-three percent of Michigan retailers said they increased sales in July over the same month last year, while 46 percent said sales declined and 11 percent reported no change. The results create a seasonally adjusted performance index of 48.3, up from 44.3 in June but below May’s 51.3.

"With all the mixed economic news, it’s natural for retailers to look ahead with more caution," said Larry Meyer, MRA chairman and CEO. "While this year’s monthly sales have shown improvement from last year, it remains a tough retail climate."

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 5,700 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.