July figures show retail sales, outlook slipping

Michigan retailers’ sales and short-term outlook slipped to their lowest July levels since 2001, according to the Michigan Retail Index, a joint project of the Michigan Retailers Association (MRA) and Federal Reserve Bank of Chicago.

The retail industry’s falloff in sales performance reversed two consecutive months of slight gains and ran to nine the streak of months in which a majority of the state’s retailers failed to post higher sales than the same month the year before.

“Higher unemployment along with higher gas prices, hot weather and torrid auto sales hurt general merchandise retailers,” said Larry Meyer, MRA chairman and CEO. “Although July is typically one of the least important months of the year for retailing, we had hoped to maintain the positive momentum.”

The Index, based on monthly surveys of MRA members, found that 35 percent of retailers increased sales in July over the same month last year while 47 percent recorded declines and 18 percent saw no change. The results create a seasonally adjusted performance index of 43.1, down from 47.1 in June and 45.9 in May. It was the worst July since the Index hit 42.2 in 2001.
The Index also found a small drop in retailers’ projections for the next three months.

Fifty-six percent believe their sales will increase for August–October, while 20 percent forecast declines and 24 percent project no change. The results create a seasonally adjusted outlook index of 66.0, down from 67.7 in June and 69.4 in May. It was the worst July since the Index hit 64.0 in 2001.

No region of the state was immune. Fewer than 50 percent of the retailers in each region reported gains.

Sales tax collections totaled $548.8 million in July, up 2.0 percent from the year-ago level. The sales tax collected from all taxable retail sales excluding motor vehicles totaled $468.1 million in July. So far in FY 2004-05, motor vehicle sales tax collections are down 10.5 percent, all other sales tax collections are up 5.8 percent, and total sales tax collections are up 3.5 percent.

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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