Warm weather helped cool retailers’ holiday sales
Heat Miser appeared to get the upper hand, as unseasonably warm weather helped push Michigan retailers’ holiday sales below forecasts.
Sales increased 0.4 percent over the 2014 season despite retailers’ forecasts of a 2 percent rise, according to the latest Michigan Retail Index survey, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
For those too young to remember, Heat Miser battles his brother Snow Miser for control of Christmas weather in a popular animated television special from the 1970s, “The Year Without a Santa Claus.”
Retailers could have done without that holiday “gift,” however.
Across the United States, holiday sales rose 3 percent — also below preseason forecasts of 3.7 percent — the National Retail Federation reported.
The warmer weather hurt sales of winter apparel and other winter merchandise. Deep discounts, mobile shopping and strong figures from last year also were contributing factors.
For the holiday season, 45 percent of Michigan retailers reported year-to-year increases, while 34 percent experienced declines and 21 percent said sales were flat.
Sales for all of 2015 were slightly stronger, however, coming in at 0.8 percent above 2014. Fifty-six percent rang up higher sales for the year, while 35 percent said sales fell, and 9 percent said sales were unchanged.
Unfortunately, December failed to provide a big finish to the season. The index survey found 42 percent of retailers increased sales over the same month last year, while 49 percent recorded declines and 9 percent reported no change.
The results create a seasonally adjusted performance index of 48.7, which is down from 50.2 in November. For purposes of comparison, a year ago in December, the performance index stood at 66.5.
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 Bank of Chicago’s Detroit branch.
Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.
Looking forward, 47 percent of retailers expect sales during January-March to increase over the same period last year, while 22 percent project a decrease and 31 percent see no change forthcoming. That puts the seasonally adjusted outlook index at 71.0, up from 62.6 in November. A year ago in December, the outlook index stood at 68.0.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.