With some state restrictions still in place through much of the month, and continual encouragement for residents to hunker down, Michigan’s retail sector saw decreased sales in November when compared to October’s performance, but industry leaders in Lansing say that most retailers maintained a sense of optimism as shoppers make their way through the marketplace in the final days running up to Christmas in search of holiday gifts.
The Michigan Retailers Association reports that their November Retail Index survey came in at 46.3, down from October’s 52.4. Thirty-nine-percent of Michigan retailers reported an increase in sales over October, while 51-percent reported a sales decline; and 10-percent reported no change. The seasonally adjusted performance index is conducted by the Michigan Retailers Association 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.
Meanwhile, 39-percent of retailers are now predicting their sales will continue to rise through February, but 45-percent said they expect a sales decline, and 16-percent don’t think things will change. That results in a 57.4 Index rating, which would be an improvement over November’s final tally.
That sense of optimism might be driven by hopes for more COVID relief. Bill Hallan, President and CEO of Michigan Retailers Association, says, “With Congress passing the recent stimulus package, we hope to see consumers use this money in their local downtowns and communities. The CARES Act certainly helped generate retail activity in the spring and we’re hopeful this next round of stimulus will do the same.”
Hallan said Tuesday, “With only a few days left to shop for last-minute Christmas gifts, we urge shoppers to buy gifts local and keep their money in Michigan. Michigan retailers are ready to serve you.”
According to the National Retail Federation, U.S. consumers are estimated to have spent a total of $186.4 million on holiday gifts over Thanksgiving weekend, compared to $189.6 million in 2019. Seventy-two percent of consumers that made purchases over that weekend, purchased holiday gifts.
The National Retail Federation defines the holiday season as running from November 1st through December 31st and they are forecasting that sales will increase between 3.6-percent and 5.2-percent over 2019 to a total between $755.3 billion and $766.7 billion. Over the 2020 holiday season, they expect that online and other non-store sales, which are included in the total, will increase between 20- and 30-percent. In total, consumers plan to spend $997.79 on gifts, holiday items and additional “non-gift” purchases for themselves and their families this year.
At $594.4 million, Michigan sales tax receipts in November 2020 decreased 13.5-percent over November of 2019.
Michigan’s unemployment rate preliminarily came in at 6.9-percent, a slight uptick from October’s 6.1-percent. Last year, Michigan’s unemployment rate was 3.9-percent. In November of 2020, the national unemployment rate dropped to 6.7-percent as compared to October’s 6.9-percent.
