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Retailers Report Weak Holiday Sales

LANSING, MI -- (Marketwired) -- 01/24/14 -- Hurt by damaging winter storms and outdated government policies that favor out-of-state, online companies, Michigan's retail industry suffered a poor holiday shopping season, the Michigan Retailers Association (MRA) said today.

Retailers posted only a 0.1 percent average increase over last holiday season, according to the Michigan Retail Index, a joint project of MRA and the Federal Reserve Bank of Chicago.

"Retailers were hit by arctic air, snow and ice storms that knocked out power across the state during the critical final days of the holiday shopping season, when stores should have been full," said James P. Hallan, MRA president and CEO.

"At the same time, they continued to be hurt by badly out-of-date laws that give out-of-state online merchants a price advantage over our Michigan companies that invest in Michigan, employ Michigan workers, pay taxes in Michigan and support their Michigan communities."

He added, "Lawmakers cannot let another Christmas go by without enacting Main Street Fairness legislation to enable Michigan businesses to compete on an equal footing with out-of-state 'vapor' retailers and put an end to government picking winners and losers on the retail playing field."

The latest Michigan Retail Index showed 38 percent of retailers increased sales during the holiday season and 41 percent experienced declines. Twenty-one percent reported flat sales.

Retailers went into the already compressed shopping season with cautious optimism, their forecasts averaging a modest 1.3 percent gain over last year. The results were even weaker.

December sales were slightly better than November's. The Index found that 39 percent of retailers increased sales over the same month last year, while 44 percent recorded declines and 17 percent saw no change. The results create a seasonally adjusted performance index of 50.5, up from 46.7 in November.

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. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.

Looking forward, 42 percent of retailers expect sales during January-March to increase over the same period last year, while 25 percent project a decrease and 33 percent no change. That puts the seasonally adjusted outlook index at 63.3, up from 58.4 in November.

Note: William Strauss, senior economist and economic advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.

Michigan Retail Index
December 2013 results
Index figures dating to July 1994 are available at

December Performance
Retailers reporting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to the same month a year ago
(numbers in parentheses indicate November results)

                                          % No
              % Increased   % Decreased   Change      Index*     Responses
Sales            39 (35)      44 (42)     17 (23)   50.5 (46.7)    102 (57)
Inventory        38 (27)      28 (16)     34 (57)   60.5 (52.1)    102 (56)
Prices           25 (16)       7 (5)      68 (79)   61.1 (56.1)    101 (56)
Promotions       41 (32)       7 (5)      52 (63)   64.8 (61.1)    101 (56)
Hiring            8 (9)        7 (11)     85 (80)   53.3 (50.9)    101 (55)

Outlook for Next 3 Months
Retailers expecting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to the same period a year ago
(numbers in parentheses indicate November results)

                                            % No
               % Increased  % Decreased    Change      Index*     Responses
Sales            42 (30)      25 (23)     33 (47)   63.3 (58.4)    101 (57)
Inventory        34 (13)      28 (37)     38 (50)   61.2 (44.1)    101 (56)
Prices           28 (16)      12 (11)     60 (73)   57.3 (53.3)    100 (56)
Promotions       33 (31)       4 (7)      63 (62)   66.6 (66.3)    101 (55)
Hiring            9 (7)        5 (9)      86 (84)   53.8 (53.0)    101 (56)

December Sales Performance & Outlook for Next 3 Months, by Region
(the first number indicates sales performance for the month; the number in parentheses indicates outlook for the next three months)

                                % Increased     % Decreased     % No Change
North                             47 (27)         33 (40)         20 (33)
West                              37 (41)         33 (18)         30 (41)
Central                           36 (46)         43 (23)         21 (31)
East                              45 (22)         44 (22)         11 (56)
Southeast                         42 (52)         55 (29)          3 (19)

Question of the Month
How much did your holiday sales increase or decrease over last year?
Avg. +0.1%

    Increase        Increase                    Decrease         Decrease
greater than 5%    between 0-5%   No change   between 0-5%   greater than 5%
      26%              12%           21%          17%              24%

How much did your 2013 sales increase or decrease over last year? Avg. +0.9%

    Increase         Increase                   Decrease         Decrease
greater than 5%    between 0-5%   No change   between 0-5%   greater than 5%
      30%              24%           12%          21%              14%

*Seasonally adjusted diffusion index. A diffusion index, which is the sum of the percent of respondents indicating increase and half the percent indicating no change, is calculated and then seasonally adjusted using the U.S. Census Bureau's X-11 Seasonal Adjustment procedure. Index values above 50 generally indicate an increase in activity, while values below 50 indicate a decrease.

Tom Scott
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