LANSING, MI--(Marketwire - November 26, 2008) - The table is set for the "official start" of the holiday shopping season on Friday, with retailers determined to make the best of the season during challenging times.

"You can almost sense a backlash against all the gloom and doom in news reports," said James P. Hallan, president and CEO of the Michigan Retailers Association (MRA). "I believe consumers and retailers could demonstrate a resiliency economists are not expecting."

Although MRA members are projecting, on average, a 1 percent decline in holiday sales compared to last year, positive factors for a stronger season include:

--  Sharply lower gasoline prices. Current prices are far less than last
    November's $3.19 per-gallon average and this year's peak above $4.
--  Attractive promotions. The season is already seeing discounts of 50
    percent and more.
--  45 percent of Michigan retailers say they have added lower-priced
    merchandise to accommodate financially strapped shoppers.
    

The October Michigan Retail Index survey, a joint project of MRA and the Federal Reserve Bank of Chicago, found that 29 percent of retailers increased sales over the same month last year, while 58 percent recorded declines and 13 percent saw no change. The results create a seasonally adjusted performance index of 34.9, down from 40.7 in September.

Thirty-three percent of retailers said they expect higher sales during November - January over the same period last year, while 42 percent project a decrease and 25 percent no change. That puts the seasonally adjusted outlook index at 45.1, down from 46.3 in September.

The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation's largest state trade association of general merchandise retailers.

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

October 2008 results

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

October 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 September results)

           % Increased  % Decreased  % No Change   Index*        Responses
Sales      29 (28)      58 (59)      13 (13)       34.9 (40.7)   162 (124)
Inventory  29 (28)      40 (41)      31 (31)       40.9 (42.8)   161 (123)
Prices     41 (47)      13 (10)      46 (43)       63.1 (69.6)   162 (123)
Promotions 33 (34)      10 (14)      57 (52)       58.7 (60.9)   162 (123)
Hiring      6  (6)      29 (26)      65 (68)       37.5 (41.1)   161 (121)

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 September results)

           % Increased  % Decreased  % No Change   Index*        Responses
Sales      33 (37)      42 (45)      25 (18)       45.1 (46.3)   163 (124)
Inventory  20 (22)      48 (44)      32 (34)       40.4 (40.8)   164 (123)
Prices     34 (47)      11 (10)      55 (43)       59.6 (70.2)   164 (122)
Promotions 48 (52)       9 (10)      43 (38)       65.1 (69.3)   162 (123)
Hiring      5 (10)      24 (18)      71 (72)       40.5 (45.7)   164 (120)

October 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      36 (18)         58 (64)          6 (18)
West       29 (45)         51 (31)         20 (24)
Central    29 (38)         62 (33)          9 (29)
East       26 (20)         47 (40)         27 (40)
Southeast  26 (36)         64 (40)         10 (24)

Question of the Month

Relative to last year, when are you planning to start your holiday promotions?

Earlier       Later       Same
30.9%         3.1%        66%

*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