Holiday shopping kicks into high gear with $20B target
Holiday shoppers in Michigan this Thanksgiving weekend quickly got into the thick of what retailers expect to be a positive holiday season.
Nearly two-thirds (63 percent) of Michigan Retailers Association members project their sales to increase over last year’s, while only 9 percent expect them to slip. Their forecasts average plus 2.1 percent, up slightly over last year’s projection of plus 2 percent.
This year, 21 percent expect to increase sales by more than 5 percent.
Michigan retail sales for the season could account for nearly $20 billion of the nation’s estimated $655 billion holiday spending.
The performance of the state’s retail industry was off slightly during October but didn’t reduce retailers’ expectations for the holidays, according to the latest Michigan Retail Index survey. The Index is a joint project of MRA and the Federal Reserve Bank of Chicago.
“All signs point to a positive holiday season, including more Michiganders working this year and consistently low gasoline prices,” MRA President and CEO James P. Hallan said.
“More than half of holiday shoppers already have started making purchases …”
Hallan also urged holiday shoppers to “Buy Nearby” at stores and websites that have invested in Michigan by building stores or internet sites in the state, creating jobs and supporting their local communities and Michigan’s economy.
“Before making purchases, shoppers should think about where their shopping dollars are going,” he said. “If they shop in Michigan, they are helping their families, neighbors, local communities and their state. If they send those dollars out of the state to an online, remote seller with no connection to Michigan, they’re not.”
MRA’s year-round Buy Nearby campaign encourages consumers to buy from retailers that are invested in Michigan. Research shows Michigan’s economy would create 75,000 new jobs and add $9 billion in economic activity if everyone practiced Buy Nearby.
The October Michigan Retail Index survey found 40 percent of Michigan retailers increased sales over the same month last year, while 40 percent recorded declines and 20 percent reported no change. The results create a seasonally adjusted performance index of 49.8, down from 56.9 in September. A year ago in October, the performance index stood at 54.1.
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, 55 percent of retailers expect sales during November-January to increase over the same period last year, while 20 percent project a decrease and 25 percent no change. That puts the seasonally adjusted outlook index at 72.6, up from 65.5 in September. A year ago in October, the outlook index stood at 66.6.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.