LANSING, MI--(Marketwire - December 23, 2008) - More than half of Michigan retailers -- 52 percent -- reduced margins on merchandise at the beginning of the shopping season, a reflection of the heavy discounting that has characterized the entire season. That's according to the latest Michigan Retail Index survey, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

"Our November survey confirms what we have been seeing throughout the holiday season -- that retailers of all sizes have reduced prices in order to encourage shoppers and spur sales," said James P. Hallan, MRA president and CEO. "We expect the discounting to continue throughout the post-Christmas and early January period."

Final numbers on the holiday season will be available from MRA on January 28. MRA members entered the season projecting, on average, a 1-percent decline in holiday sales compared to last year.

The Michigan Retail Index survey for November found that 23 percent of retailers increased sales over the same month last year, while 65 percent recorded declines and 12 percent saw no change. The results create a seasonally adjusted performance index of 28.8, down from 34.9 in October.

Only 17 percent of retailers said they expect higher sales during December - February over the same period last year, while 58 percent project a decrease and 25 percent no change. That puts the seasonally adjusted outlook index at 34.1, down from 45.1 in October.

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

November 2008 results
Index figures dating to July 1994 are available at
 www.retailers.com/news/retailindex.html

November 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 October results)
             % Increased  % Decreased  % No Change  Index*       Responses
Sales        23 (29)      65 (58)      12 (13)      28.8 (34.9)  169 (162)
Inventory    23 (29)      41 (40)      36 (31)      40.1 (40.9)  168 (161)
Prices       38 (41)      16 (13)      46 (46)      61.5 (63.1)  166 (162)
Promotions   48 (33)      11 (10)      41 (57)      68.5 (58.7)  168 (162)
Hiring        2  (6)      29 (29)      69 (65)      36.7 (37.5)  166 (161)

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 October results)
             % Increased  % Decreased  % No Change  Index*       Responses
Sales        17 (33)      58 (42)      25 (25)      34.1 (45.1)  167 (163)
Inventory     8 (20)      61 (48)      31 (32)      30.8 (40.4)  167 (164)
Prices       32 (34)      20 (11)      48 (55)      54.5 (59.6)  166 (164)
Promotions   41 (48)      14  (9)      45 (43)      70.3 (65.1)  166 (162)
Hiring        2  (5)      28 (24)      70 (71)      40.2 (40.5)  168 (164)

November 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           21 (12)         67 (66)           12 (22)
West            28 (24)         59 (52)           13 (24)
Central         35  (7)         62 (65)            3 (28)
East            11  (5)         72 (67)           17 (28)
Southeast       17 (28)         65 (46)           18 (26)

Question of the Month
Relative to last year, how are your margins on holiday merchandise?
Larger                  Smaller                 Same
5.0%                    52.2%                   42.8%


*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: Amy Buttery 517.372.5656