LANSING, Mich. – Most stores were forced to close through the entirety of April due to the coronavirus pandemic, and the results of the Michigan Retail Index reflect the expected drastic decline in numbers.
But there are positive signs as well, with 59% of retailers expecting increased sales through July; 37% predict a decrease and 4% expect no change. That results in an adjusted outlook index of 55.4.
“While you’d expect sales to go up after an abysmal April, we’re heartened to see that retailers are projecting such a hopeful outlook,” said William Hallan, President and CEO of Michigan Retailers Association.
The April Retail Index survey came in at 10.8, a steep drop from April 2019’s 57.0, and another drop from March 2020’s 11.6. The seasonally adjusted performance index is conducted by Michigan Retailers Association (MRA) in cooperation with the Federal Reserve Bank of Chicago’s Detroit branch.
The 100-point index provides a snapshot of the state’s overall retail industry. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.
The April survey showed that 11% of respondents reported sales increases over March. Eighty-seven percent of retailers recorded declines and 2% reported no change.
Most stores who completed the survey expect to be re-opened by mid-June.
“We pushed the Governor to fully reopen retail because we believe it can be done safely and responsibly,” said Bill Hallan, President and CEO of Michigan Retailers Association. “But we also support those retailers who choose to wait until they’re fully prepared. They’re opening an entirely new business model in many cases, and we’re asking shoppers to be patient as stores adjust to this.”
Sales tax receipts in April decreased 30% over April 2019 and were $239.3 million below the forecasted level. Michigan’s unemployment rate preliminarily rose to 22.7% from March 2020’s 4.3%. Last year, Michigan’s unemployment rate was 4.3%. In April 2020, the national rate came in at 14.7%.
U.S. retail sales tumbled by a record 16.4%, according to the U.S. Commerce Department. Its report earlier this month said that the monthly decline nearly doubled the previous record drop of 8.3% — set just one month earlier.
Note: William Strauss, senior economist and economic advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.