For Immediate Release
December 22, 2004

LANSING — With time running out, Michigan retailers are looking for a strong finish to the holiday shopping season. November sales were lackluster and December’s appear to be at the low end of projections.

In addition, a significant number of retailers are seeing their margins eroded on holiday merchandise, according to the monthly Michigan Retail Index, a joint project of the Michigan Retailers Association (MRA) and Federal Reserve Bank of Chicago.

"Coming off a good October, the retail industry didn’t see the strong November start to the holiday shopping season that it was expecting," said Larry Meyer, MRA chairman and CEO. "And from all appearances, December has been okay but nothing to get excited about. Retailers are looking for a strong final week before Christmas—and a strong week after."

The November Index found that 40 percent of retailers increased sales over the same month last year, while 15 percent reported as-good sales and 45 percent recorded declines. The results create a seasonally adjusted performance index of 48.9, down from 52.9 in October.

Fifty-one percent of retailers believe their sales will increase for December–February over the same period last year, while 22 percent project as-good sales and 27 percent predict sales will decline. The results create a seasonally adjusted outlook index of 80.4, down from 88.2 in October.

In addition, 33 percent said their holiday margins are smaller than last year’s. Greater discounting, stronger competition and higher costs are believed responsible. However, a majority—54 percent—said margins are the same, and 12 percent said they are up.

The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation’s largest state trade association of general merchandise retailers.

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