Retailers eke out annual gain despite lackluster holiday sales
Weaker than expected December sales undercut November gains, producing mixed holiday season results for Michigan’s retail industry, according to the Michigan Retail Index, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
“Holiday sales were uneven. For every five retailers, roughly two increased sales, two experienced decreases and one matched last year’s,” MRA President and CEO James P. Hallan said.
Retailers’ holiday sales declined an average 0.2 percent from the 2015 holiday season. Forty percent of retailers registered gains, 42 percent declines and 18 percent said sales were flat.
Going into the season, 63 percent of MRA members projected their sales would increase, while only 9 percent expected them to slip. Their forecasts averaged plus-2.1 percent.
However, year-over-year sales for all of 2016 were positive. They rose an average of 0.5 percent, with 51 percent of retailers growing sales and 37 percent experiencing decreases.
The Michigan Retail Index survey for December alone found 39 percent of retailers increased sales over the same month last year, while 41 percent recorded declines and 20 percent reported no change. The results create a seasonally adjusted performance index of 52.0, down from 55.7 in November. A year ago in December, the performance index stood at 48.7.
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, 36 percent of retailers expect sales during first quarter 2017 to increase over the same period last year, while 20 percent project a decrease and 44 percent no change. That puts the seasonally adjusted outlook index at 65.3, down from 83.5 in November. A year ago in December, the outlook index stood at 71.
Across the nation, retail sales excluding autos and gasoline were flat for December, the U.S. Commerce Department reported.
Independently, National Retail Federation economists said U.S. holiday sales increased 4 percent over last year.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.