Retailers' Outlook Holds Steady as Index Marks 10th Year

For Immediate Release
August 25, 2004

LANSING — On the 10th anniversary of the landmark Michigan Retail Index, Michigan retailers are finding the marketplace anything but a piece of cake.

Hit by higher gasoline prices, unseasonable weather and inconsistent economic growth, retailers have been unable to maintain the positive momentum of the first four months of this year. However, retailers' short-term outlook has remained steady and positive.

According to the Index, 42 percent of retailers increased sales in July over the same month last year, while 13 percent reported as-good sales and 45 percent recorded declines. The results create a seasonally adjusted performance index of 44.6, down from 51.7 in June and up from 39.2 in May. For the first four months of the year, the Index climbed from 49.9 in January to 53.1 in February, 59.9 in March and 56.7 in April.

Looking ahead, 61 percent forecast better sales for August-October over the same period last year, while 23 percent project as-good sales and 16 percent expect declines. The results create a seasonally adjusted outlook index of 68.8, virtually unchanged from June and May.

"We're seeing significant swings in monthly sales performance, no doubt caused by high gas prices, unseasonable weather and other factors. But retailers are maintaining their optimism as they look ahead to the fall season," said Larry Meyer, MRA chairman and CEO.

The Index was launched in July 1994 by the Michigan Retailers Association (MRA) and Federal Reserve Bank of Chicago. It was the first (and is believed to remain the only) survey of its kind to determine the monthly performance and outlook of a state's retail industry.

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 nearly 6,000 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.