Michigan Retail Sales Rebound, but Retailers Wary

LANSING, MI--(Marketwire - May 25, 2011) - Michigan retailers rang up better sales in April, although they remain concerned about high gasoline prices and unemployment, according to the latest Michigan Retail Index survey conducted by Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

"A late Easter and resilient consumers helped overall retail sales rebound in April," said James P. Hallan, MRA president and chief executive officer.

"However, retailers' short-term sales projections dipped for the third month in a row, indicating continued concern about the economy. The recent easing of gas prices -- after this survey was completed -- should help soften some of those fears as we head into summer."

Retail sales dipped sharply in March as a combination of rising prices at the pump, a late Easter and cold weather hit the industry. But that same late Easter helped pull up April sales, and enough consumers shrugged off $4-a-gallon gasoline to move the Index back into positive territory.

The Michigan Retail Index for April found that 45 percent of retailers increased sales over the same month last year, while 32 percent recorded declines and 23 percent saw no change. The results create a seasonally adjusted performance index of 53.1, up from 42.9 in March.

Index values above 50 generally indicate an increase in overall retail activity.

Looking forward, 48 percent of retailers expect sales during May-July to increase over the same period last year, while 16 percent project a decrease and 36 percent no change. That puts the seasonally adjusted outlook index at 60.9, down from 63.8 in March and 72.3 in both February and January.

Department stores, gift retailers and automotive service shops posted the best performance in April. Central and Southeast Michigan were the strongest regions.

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
April 2011 results

Index figures dating to July 1994 are available at http://www.retailers.com/mra/news/michigan-retail-index.html

April 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 March results)

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 March results)

April 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)

*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.