Michigan Retailers See Continued Improvement

LANSING, MI--(Marketwire - July 22, 2009) - Michigan's retail industry fared better in June as more retailers increased sales and boosted their short-term outlook, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

Although the industry remains weak, with only a third of retailers posting better year-to-year sales for June, it was the second consecutive month of improvement. Optimism for the next three months also climbed, reversing a one-month decline.

"June was the best month for Michigan retailers since last July," said MRA President and CEO James P. Hallan. "Conditions remain extremely difficult for the retail industry, but the numbers have started moving in the right direction. We haven't had two consecutive months of improvement since spring of 2008."

Nationally, retail sales also rose in June, according to the U.S. Commerce Department. It attributed much of the increase to federal economic stimulus funds working their way into stores.

The Michigan Retail Index survey for June found that 33 percent of retailers increased sales over the same month last year, while 52 percent recorded declines and 15 percent saw no change. The results create a seasonally adjusted performance index of 41.2, up from 35.2 in May.

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

Looking ahead, 35 percent of retailers said they expect higher sales during July - September over the same period last year, while 39 percent project a decrease and 26 percent no change. That puts the seasonally adjusted outlook index at 48.7, up from 45.6 in May.

Apparel retailers did the best, with 63 percent reporting better June sales.

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

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

June 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 May results)

            % Increased  % Decreased  % No Change  Index*        Responses
Sales       33 (31)      52 (54)      15 (15)      41.2 (35.2)   103 (116)
Inventory   19 (19)      47 (44)      34 (37)      39.0 (35.9)   102 (115)
Prices      34 (30)       9 (13)      57 (57)      63.9 (60.3)   102 (113)
Promotions  38 (41)       7 (13)      55 (46)      67.5 (64.8)   101 (114)
Hiring       7 (10)      23 (22)      70 (68)      41.5 (41.9)   102 (114)

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 May results)

            % Increased  % Decreased  % No Change  Index*        Responses
Sales       35 (34)      39 (40)      26 (26)      48.7 (45.6)   103 (116)
Inventory   20 (26)      42 (43)      38 (31)      38.6 (39.3)   102 (115)
Prices      26 (28)      10 (10)      64 (62)      58.4 (60.6)   102 (114)
Promotions  43 (51)       4 (10)      53 (39)      71.1 (73.9)   100 (115)
Hiring       6 ( 7)      16 (16)      78 (77)      46.3 (44.8)   102 (115)

June 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       32 (36)      59 (55)       9 ( 9)
West        30 (45)      50 (15)      20 (40)
Central     33 (38)      53 (38)      14 (24)
East        11 ( 0)      56 (56)      33 (44)
Southeast   45 (34)      48 (38)       7 (28)

*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