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Retailers forecasting happier holiday season The holiday season should be a little merrier
for Michigan retailers in 2003. Michigan retailers are projecting a 5 percent
increase in holiday sales this year, in keeping with national projections
for an improved shopping season.
The Michigan Retail Index, a joint project
of the Michigan Retailers Association (MRA) and Federal Reserve Bank of
Chicago, found that 67 percent of retailers believe their holiday sales
will increase over last year, with growth averaging 4.96 percent. Last year’s holiday sales decreased
3.2 percent for Michigan retailers, the first decline since the Index
was established in 1994. Stores had projected an increase of 4 percent. “We’ve seen sales growth throughout
much of this year, a trend that should continue through the holiday season,”
said Larry Meyer, MRA chairman and CEO. “Two of the past three months
have posted some of the best overall numbers in nearly two years.” The National Retail Federation is projecting
growth of 5.7 percent in holiday sales. Other national projections range
from 3.5 to 7 percent. According to the Index, which is based on
a monthly survey of MRA members, 42 percent of retailers increased sales
in September from the same month a year ago, while 40 percent experienced
declines and 18 percent reported no change. The results create a seasonally
adjusted performance index of 53.1, up from 44.3 in August. It was the
best September since 2000. In addition, 67 percent project increased
sales for October-December over the same period a year ago, while 14 percent
expect declines and 19 percent predict flat sales. The results create
a seasonally adjusted outlook index of 74.3, the highest in 19 months
and the best for September since 1999. Darla Stites, co-owner of What To Wear in
Traverse City, thinks the projection of a 5 percent increase in holiday
sales “sounds about right. We’re pretty optimistic, based on
what we’ve seen this summer and fall.” It shouldn’t be too hard to show improvement
from last year’s dismal figures. Still, many retailers are notably
guarded when discussing their expectations. Some may have last year in
mind, when even modest hopes were dashed by dismal retail performance. Sue Wrzesinski, of Toy House in Jackson,
said, “There’s no reason, at this point, to be either overly
concerned or overly hopeful. We’ll wait and see.” At the Bon Ton Shoppe, a gift store with locations in Livonia, Farmington, Milford and Brighton, Harry Wingerter, Jr. said, “Unfortunately, we don’t expect to do any better than last year. We have four stores in four completely different areas, and it’s the same at all of them. For the past few months, there’s been very little change from last year. Let’s hope it changes soon!” Bill Freeman, at Rachel’s Hallmark in
Flint, was more upbeat. “At the moment, I’m optimistic. Business
started taking an upswing around mid-summer, and we have seen slow but
steady increases in both traffic and transactions since then.” Freeman addressed larger market forces as
well: “There’s less uncertainty in the world, with no Iraq war
threatening like last year, and the stock market has been steadier—all
of that weighs on people’s minds. So I think this year is likely
to be better than last.” Dennis DeVries, owner of DeVries Jewelers
in Grand Rapids, notes that Michigan may be in a slightly different position
than the national scene, however. “Michigan’s economy seems to be
a little behind the rest of the country, with a lot of layoffs, so I imagine
Michigan retailers won’t do as well this season as the rest of the
nation. “We’re doing fine here,” DeVries
added. “But being realistic, we’ll be pleased to see a modest
increase over last year—we’re not expecting anything spectacular.” Research on consumers is in line with expectations overall, and should give retailers cause for optimism. According to the National Retail Federation’s 2003 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch for NRF, the average consumer plans to spend $671.89 this holiday season, up from 2002 when consumers spent an average of $648.85.
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