Michigan Retailers Hopeful For Summer
LANSING — Michigan retailers’ short-term forecasts are up slightly following a small gain in sales for the industry overall during May. But the gain wasn’t enough to break the string of disappointing months — now at seven — for most retailers.
According to the Michigan Retail Index, a joint project of the Michigan Retailers Association (MRA) and Federal Reserve Bank of Chicago, 59 percent of retailers believe their sales will increase for June-August over the same period last year, while 28 percent expect as-good sales and 13 percent predict sales will decline. The results create a seasonably adjusted outlook index of 69.4, up from 67.1 in April.
The Index also found that 39 percent of retailers increased sales over May 2004, while 15 percent reported as-good sales and 46 percent recorded declines. The results create a seasonably adjusted performance index of 45.9, up from 41.6 in April but the seventh consecutive month below the 50.0 mark.
Index numbers below 50.0 indicate an overall decrease in retail activity.
“The small gain in sales performance during May led to a slight uptick in optimism,” said Larry Meyer, MRA chairman and CEO. “But Michigan’s retail industry continues to struggle. October 2004 was the last time a majority of retailers posted improved year-to-year sales.”
Apparel retailers and furniture and appliance stores led the industry in May, with 50 percent of stores in those trade lines ringing up higher sales than a year ago. Apparel retailers are also the most upbeat, with 73 percent projecting better summer sales.
These industries have good reason to be optimistic in the months ahead. During May, they were the only industries to see an increase in the number of respondents reporting higher sales, up 14 percent in apparel and 5 percent in furniture and appliances. Electronics and computers saw the worst decline, 50 percent, with no retailers in the state reporting increased sales.
In Grand Rapids, 25 percent fewer retailers reported increased sales than in April. However, 38 percent more expect an increase in the coming three months. The report did not specify industry results by market. Grand Rapids was the only West Michigan market tracked.