LANSING – Conditions are good for the official start of the holiday shopping season (regardless of whether it begins on Thanksgiving or the day after): brisk weather, lower gasoline prices, reduced unemployment and optimistic retailers offering big bargains.
Nearly two-thirds (63 percent) of Michigan retailers are forecasting better holiday sales over last year, and almost a third (28 percent) expect their sales will climb more than 5 percent, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.
The latest Michigan Retail Index found continued positive sales activity during October (50.3 on the 100-point index), although lower than September’s level (62.1). The Index continued its up–and-down pattern since the summer.
MRA President and CEO James P. Hallan said signs look good for a stronger holiday season over last year, when severe weather wiped out the final days in several areas.
“The economic conditions are in place for a better season, especially more people working and lower gas prices,” said Hallan. “Consumers appear more ready to spend, although some will need the type of compelling reason – big bargains – retailers offer this time of year.”
The October monthly survey of MRA members showed 41 percent of retailers increased sales over the same month last year, while 39 percent recorded declines and 20 percent reported no change. The results create a seasonally adjusted performance index of 50.3, down from 62.1 in September. A year ago October the Index stood at 54.8.
The 100-point Index gauges the performance of the state’s overall retail industry, based on monthly surveys conducted by MRA and the Federal Reserve. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.
Looking forward, 51 percent of retailers expect sales during November–January to increase over the same period last year, while 20 percent project a decrease and 29 percent no change. That puts the seasonally adjusted outlook index at 67.5, down from 73.6 in September. A year ago October the Index stood at 64.3.
Note: William Strauss, senior economist and economic advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.
