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Michigan retailers raise expectations for fall Michigan retailers project better fall sales
after lackluster consumer spending much of the summer. In fact, retailers’ short-term forecasts
are the best since February, according to the Michigan Retail Index, a
joint project of the Michigan Retailers Association (MRA) and the Federal
Reserve Bank of Chicago. Sixty-four percent of MRA members surveyed
for the Index expect better sales for September through November over
the same period last year, while 21 percent project as-good sales and
15 percent expect declines. The results create a seasonally adjusted outlook
index of 73.1, up from 68.8 in July and the highest since 74.1 in February. For August, however, the Index found that
40 percent of retailers increased sales, 15 percent reported as-good sales
and 45 recorded declines over the same month last year. The results create
a seasonally adjusted performance index of 48.4, up from 44.6 in July
but still below the key 50 mark. July sales were similar: 42 percent of retailers
reported increased sales over the same month last year, 13 percent reported
as-good sales and 45 percent recorded declines. “After strengthened overall retail industry
performance the first four months of this year, sales have been on a roller-coaster
ride—with the peaks getting lower,” said Larry Meyer, MRA chairman
and CEO. “But retailers’ optimism is climbing for the fall season
and is the strongest in several months.” In August, gifts and apparel retailers saw
the greatest falloff in sales, with only 27 percent of gift stores and
30 percent of clothing stores ringing up increased sales from a year ago. In contrast, sales tax revenue totaled $607
million in August, representing a 20.3 percent increase from the year-ago
level. This large upward swing in sales tax collections was due in part to the “weekend factor”. When a month ends on a weekend, the following month will report higher sales tax because final weekend sales spill over into the next month. August 2004 revenue is artificially high because July ended on a weekend; August 2003 revenue was artificially low because it ended on a weekend. Complete results of this month’s Michigan Retail Index—including data on sales, inventory, prices, promotions and hiring—are available at www.retailers.com/news/retailindex.html. The website includes figures dating back to July 1994.
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