They’ve watched gasoline prices go down…they’ve seen the numbers of employed people go up…and they’ve largely seen fairly steady traffic in their storefronts, all leading the majority of Michigan retailers to forecast a positive holiday shopping season. In fact, they foresee sales rising by an average of 2.1-percent over the solid holiday season of 2015.
Those are the results of the Michigan Retail Index, which is a joint project of the Michigan Retailers Association and the Federal Reserve Bank of Chicago.
In looking at the annual forecast, Michigan Retailers Association President & CEO James Hallan says, “Nearly two-thirds of Michigan retailers expect to increase their holiday sales over last year.” He pins that data on the fact that, “They’re looking at a stronger consumer amid positive economic conditions such as reduced unemployment and lower gasoline prices.”
Sixty-three percent expect to increase sales, with 21-percent expecting increases of more than 5-percent. Only 9-percent of the retail market expects sales to fall below last year’s levels.
Hallan says the retailers’ forecasts are in line with national projections. The National Retail Federation predicts total sales to increase 3.6-percent and the International Council of Shopping Centers projects 3.3-percent. Michigan is expected to ring up nearly $20-billion of the nation’s estimated $656-billion in holiday sales.
Hallan noted that retail sales rebounded in Michigan and across the U.S. in September. National retail sales, excluding autos and gasoline, rose 0.3-percent in September over August, according to the U.S. Commerce Department.
The September Michigan Retail Index survey found 45-percent of Michigan retailers increased sales over the same month last year, while 32-percent recorded declines and 23-percent reported no change. The results create a seasonally adjusted performance index of 56.9, up from 50.8 in August. A year ago September the performance index stood at 51.1.
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, 54-percent of retailers expect sales during October–December to increase over the same period last year, while 17-percent project a decrease and 29-percent no change. That puts the seasonally adjusted outlook index at 65.5, down from 71.6 in August. A year ago September, the outlook index stood at 75.4.
