For Immediate Release

January 27, 2010

LANSING — Michigan retailers’ outlook for the 1st Quarter of 2010 rose to its highest level in three years, following a stronger December sales performance, according to the latest Michigan Retail Index survey. The survey is a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The entire holiday shopping season also was an improvement over the previous year, although a weaker November kept overall holiday gains in check.

“December lived up to our expectations and boosted retailers’ outlook for the start of 2010,” said MRA President and CEO James P. Hallan. “For the first time in several years, more retailers reported holiday gains than declines.”

The Index survey of MRA members showed that 43 percent reported holiday sales increases from the previous year, while 17 percent reported no change and 39 percent reported declines. For 2008, 45 percent reported gains and 48 percent reported declines.

The Michigan Retail Index survey for December alone found that 40 percent of retailers increased sales over the same month last year, while 44 percent recorded declines and 16 percent saw no change. The results create a seasonally adjusted performance index of 47.8, up from 39.7 in November and 41.4 in October. A year ago, the index had dropped to 30.4 in December and 28.8 in November.

Index values above 50 generally indicate an increase in positive activity, while values below 50 indicate a decrease.

Looking ahead, 42 percent of retailers expect sales during the 1st Quarter of 2010 to improve over the same period last year, while 28 percent project a decrease and 30 percent no change. That puts the seasonally adjusted outlook index at 57.1, up from 56.7 in November and 48.9 in October. A year ago the index had fallen to 36.6 in December and 34.1 in November.

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