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Most Michigan retailers expect 2011 sales growth
More than three of every four Michigan retailers (76 percent) expect their 2011 sales to grow, with the largest group projecting gains of less than 5 percent, according to the latest Michigan Retail Index survey conducted by Michigan Retailers Association and the Federal Reserve Bank of Chicago.
Forty percent of respondents said they expect their sales to rise less than 5 percent, while 31 percent peg their gains at 5 to 10 percent and 5 percent expect double-digit growth. Fourteen percent predict flat sales and 10 percent believe their sales will decline.
The forecasts follow a January with positive sales, but at a lower level from a November and December that made up the best holiday shopping season in more than a decade.
Retailers continue to see Michigan’s economy improving, but their forecasts remain tempered by such factors as high unemployment and the sluggish housing market. At this point, they believe 2011 will be a good year, not necessarily a great year.
The Michigan Retail Index for January found that 39 percent of retailers increased sales over the same month last year, while 38 percent recorded declines and 23 percent saw no change. The results create a seasonally adjusted performance index of 53.3, down from 61.9 in December. It was the best January since 2006. A year ago January, the sales performance index was 49.9.
Index values above 50 generally indicate an increase in overall retail activity.
Looking forward, 55 percent of retailers expect sales during February — April to increase over the same period last year, while 15 percent project a decrease and 30 percent no change. That puts the seasonally adjusted outlook index at 72.3, down from 77.2 in December. It was the best January figure since 2004. A year ago January, the sales outlook index stood at 61.8.
James P. Hallan is president and CEO of the Michigan Retailers Association, the nation’s largest state trade association of general merchandise retailers.