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Michigan retailers’ sales forecasts slip in MayMichigan retailers are cooling their early summer sales projections. Fewer than two in five now expect to increase sales during the next 90 days, a decline in optimism from recent months, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago. The scaled-back forecasts follow a drop in sales during April. “I believe the rapid rise in gasoline prices is having a negative effect on sales,” said one retailer who responded to the confidential survey of MRA members. “If it’s this high now, I’m concerned about the public’s planning for the summer months. Couple that with the state of the economy and I’m very concerned about retail sales for the next few months.” Larry Meyer, MRA chairman and CEO, said higher gasoline prices and Michigan’s higher unemployment rate in April contributed to the drop in overall retail industry performance. He said retailers are telling him that the sharp rise in gasoline prices cut into their May sales as well. The Michigan Retail Index showed that 35 percent of retailers increased sales in April over the same month last year, while 47 percent recorded declines and 13 percent saw no change. The results create a seasonally adjusted performance index of 39.7, down from 49.0, in March. In addition, 38 percent believe their sales will increase for May-July, while 27 percent forecast declines and 29 percent project no change. The results create a seasonally adjusted outlook index of 49.8, down from 57.1 in March. Sales tax collections totaled $576 million in April, which was up 22.6 percent. Timing factors help explain the apparent strong growth. March ended on a weekend, which caused some sales tax collections to spill over into April. In addition, April collections were artificially low last year due to this weekend effect. In addition, motor vehicle sales tax revenue totaled $66.8 million, up 11 percent from last year’s level. 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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