For Immediate Release
January 22, 2003

LANSING — Michigan retailers are lowering their expectations for the 1st Quarter of 2003, following a dismal holiday season.

About a third of stores (32 percent) expect to increase sales over the same period last year, while another 32 percent expect no change and 36 expect sales to decrease, according to the Michigan Retail Index, a joint project of the Michigan Retailers Association (MRA) and Federal Reserve Bank of Chicago. The results create a seasonally adjusted outlook index of 61.2—down from 69.3 in November.

On average, retailers’ holiday sales decreased 3.2 percent from the previous year, according to the Index. It was the first time since the Index was established in 1994 that holiday sales fell from the previous year. It was also the third consecutive holiday season with poor results. Retailers had gone into the ’02 season forecasting increases averaging 3.7 percent—also the lowest on record.

For December, the Index survey of MRA members found that 28 percent increased sales from a year ago, while 59 percent experienced declines and 13 percent reported no change. The results create a seasonally adjusted performance index of 33.1, down from 36.1 in November.

"The holiday figures are disappointing, but in line with national figures," said Larry Meyer, MRA chairman and CEO. "It certainly wasn’t the result of what stores did or didn’t do. Retailers worked harder than ever to sell merchandise, but there were still too many economic uncertainties all around us."

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 5,800 retail business members operate more than 13,000 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.