Michigan Retail Sales and Outlook Advance

LANSING, MI--(Marketwire - August 26, 2009) - An important gauge of the health of Michigan's retail industry moved higher during July as retailers' sales and short-term outlook both improved.

The Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago, showed continued improvement for the weakened industry.

"July was the best month for Michigan retailers since a year ago July," said MRA President and CEO James P. Hallan. "For the third consecutive month, more retailers reported better year-to-year sales. Their outlook also rose, for the second month in a row."

"While conditions could hardly be called 'back to normal,' retailers appear to be benefitting from new stability in the auto industry and the federal stimulus dollars moving through the economy," he added.

The Michigan Retail Index survey for July found that 37 percent of retailers increased sales over the same month last year, while 47 percent recorded declines and 16 percent saw no change. The results create a seasonally adjusted performance index of 45.0, up from 41.2 in June, 35.2 in May and 32.8 in April.

Index values above 50 generally indicate an increase in positive activity, while values below 50 indicate a decrease.

Looking ahead, 45 percent of retailers said they expect higher sales during August - October over the same period last year, while 34 percent project a decrease and 21 percent no change. That puts the seasonally adjusted outlook index at 52.7, up from 48.7 in June and 45.6 in May.

General merchandise retailers fared the best, as did stores in Grand Rapids and northern Michigan.

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
July 2009 results
Index figures dating to July 1994 are available at
www.retailers.com/news/retailindex.html

July 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 June results)
          % Increased % Decreased % No Change   Index*      Responses
Sales       37 (33)    47 (52)      16 (15)   45.0 (41.2)   107 (103)
Inventory   17 (19)    53 (47)      30 (34)   29.4 (39.0)   107 (102)
Prices      26 (34)     6  (9)      68 (57)   59.8 (63.9)   107 (102)
Promotions  32 (38)     5  (7)      63 (55)   63.0 (67.5)   107 (101)
Hiring       4  (7)    19 (23)      77 (70)   40.8 (41.5)   107 (102)

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 June results)
          % Increased % Decreased % No Change   Index*      Responses
Sales       45 (35)    34 (39)      21 (26)   52.7 (48.7)   108 (103)
Inventory   24 (20)    37 (42)      39 (38)   39.2 (38.6)   107 (102)
Prices      26 (26)     6 (10)      68 (64)   60.1 (58.4)   105 (102)
Promotions  40 (43)     5  (4)      55 (53)   64.4 (71.1)   106 (100)
Hiring       7  (6)    15 (16)      78 (78)   44.2 (46.3)   107 (102)

July 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       42 (44)    46 (37)      12 (19)
West        53 (47)    47 (40)       0 (13)
Central     27 (50)    41 (32)      32 (18)
East        33 (22)    22 (33)      45 (45)
Southeast   36 (46)    55 (30)       9 (24)

Question of the Month

How do you feel about current economic conditions with regard to your business?

The worst is over and we're slowly starting to recover: 35.9%

The worst is still to come: 24.5%

We're in the worst conditions right now: 39.6%

*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.

Contact Information: Contact: Tom Scott 517.372.5656