Bolstered by a sizable upswing in sales for September over less stellar results in August, Michigan’s retail community is “cautiously optimistic” heading into the critical holiday sales season through the end of the year.
The Michigan Retailers Association says this week that the September Retail Index survey came in at 63.7, an increase from August’s 48.1. The seasonally adjusted performance index is conducted by the Michigan Retailers Association (MRA) in cooperation with the Federal Reserve Bank of Chicago’s Detroit branch.
The 100-point index provides a snapshot of the state’s overall retail industry. Index values above 50 generally indicate positive activity, and the higher the number, the stronger the activity.
The September survey showed that 51-percent of retailers recorded increases over August. Thirty-three percent of respondents reported sales declines and 16-percent reported no change.
With the holidays looming, retailers are optimistic for the next three months, but with caution. Many hope that consumers will shop early, fearing that if they wait until the last minute, they may run into shipping issues or product shortages on popular items.
Forty-nine-percent of Michigan retailers are predicting their sales will continue to rise through December, however 31-percent admitted that they expect a sales decline, and 20-percent don’t think things will change at all. That results in a 60.0 Index rating, a bit lower than September’s sharp turnaround from August.
Retail is still proving to be a safe activity during the pandemic, and that has boosted consumer confidence, according to Bill Hallan, President and CEO of Michigan Retailers Association.
Hallan says, “We hope that continues. Many downtowns are gearing up to help businesses lure holiday customers by planning winter markets and other outdoor activities,” and adds, “More consumers understand the importance of buying nearby. It’s heartening to see that shoppers realize we’re all in this together.”
According to the National Retail Federation, clothing and accessory stores sales were up 11-percent seasonally adjusted month-over-month but were down 12-percent year-over-year. Sporting goods stores sales were up 5.6-percent seasonally adjusted month-over-month and were up 18.3-percent year-over-year.
At $749.5 million, Michigan sales tax receipts in September of 2020 decreased 6.6-percent over September of 2019 and also decreased 8.0-percent from August of 2020.
Michigan’s unemployment rate preliminarily came in at 8.5-percent. Last year, Michigan’s unemployment rate was 3.9-percent. In September 2020, the national unemployment rate dropped to 7.9-percent compared to August’s 8.4-percent.
