Retailers See Improvement, But Skeptical About Stimulus

 | Source: Michigan Retailers Association Michigan Retailers Association

LANSING, MI--(Marketwire - March 25, 2009) - Michigan retailers improved their monthly sales and outlook during February, but said they don't believe the federal stimulus package will have much impact on their businesses, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

In fact, more retailers thought the stimulus package would do more harm (20.6 percent) than good (14.5 percent) to their businesses. The majority (64.9 percent), however, said they expect the wide-ranging, billion-dollar initiative to have no impact at all on them.

"Although retail continues to struggle as unemployment rises in Michigan, retailers bounced back from a dismal January," said James P. Hallan, MRA president and CEO. "Another encouraging sign was that their optimism also moved up -- for the third month in a row -- despite holding out little hope that their stores will benefit from the billions of dollars being spent as part of the stimulus package."

The Michigan Retail Index survey for February found that 32 percent of retailers increased sales over the same month last year, while 54 percent recorded declines and 14 percent saw no change. The results create a seasonally adjusted performance index of 40.8, up from 29.0 in January.

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

Looking ahead, 34 percent of retailers said they expect higher sales during March - May over the same period last year, while 41 percent project a decrease and 25 percent no change. That puts the seasonally adjusted outlook index at 44.6, up from 41.6 in January.

Note: William Strauss, Senior Economist and Economic Advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151. Also, regional, local and trade-specific data were not available this month. 

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

February 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 January results)

          % Increased   % Decreased   % No Change     Index*      Responses
Sales         32 (23)       54 (64)      14 (13)    40.8 (29.0)   132 (168)
Inventory     12 (11)       57 (54)      31 (35)    28.7 (32.7)   131 (167)
Prices        33 (37)       17 (11)      50 (52)    56.1 (63.2)   131 (166)
Promotions    35 (32)       11 (11)      54 (57)    63.9 (63.0)   130 (167)
Hiring         8  (2)       32 (31)      60 (67)    39.8 (36.9)   131 (167)

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 January results)

          % Increased   % Decreased   % No Change     Index*      Responses
Sales         34 (28)       41 (44)      25 (28)    44.6 (41.6)   131 (166)
Inventory     19 (14)       40 (47)      41 (39)    35.3 (32.3)   128 (165)
Prices        35 (32)        6 (11)      59 (57)    63.0 (61.5)   130 (165)
Promotions    49 (43)        6 (11)      45 (46)    69.4 (63.5)   128 (166)
Hiring         8  (7)       22 (26)      70 (67)    41.4 (41.2)   130 (165)

February 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 (28)       46 (52)      12 (20)
West          30 (37)       55 (37)      15 (26)
Central       33 (54)       54 (29)      13 (17)
East          33 (16)       33 (42)      34 (42)
Southeast     25 (28)       67 (44)       8 (28)

Question of the Month
How much of an impact do you expect the federal stimulus package to have on
your business this year?

Very Negative       Negative        No       Positive     Very Positive
   Impact            Impact       Impact      Impact          Impact
    6.9%              13.7%        64.9%       13.7%           0.8%

*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: Tom Scott 517.372.5656

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