In what is typically a slow month for retailers, a significant number of merchants saw a decrease in sales to start the year.
About 61 percent of retailers surveyed reported sales fell from December to January, according to a report from the Michigan Retailers Association, while about 33 percent said sales increased. Around 6 percent of retailers reported no change in sales.
Despite the fall-off, the MRA Retail Index survey number for January is 53.8 — an increase from December’s 41.2. An increase in retail sales doesn’t mean total sales volume, it means in relation to how they typically perform, according to the report.
The seasonally-adjusted performance index is conducted by the MRA in partnership 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.
MRA President and CEO Bill Hallan in a news release said the uptick in the index is encouraging and the challenges brought on by soaring inflation have had a lesser impact on sales than predicted. Hallan touted the big increase in the index month-over-month, too.
“The important number to focus on in the report is the Index,” Hallan said in the release. “When we see over a 12-point increase month-to-month, especially in what typically is a slower month for retail, it’s a strong sign.”
Despite the big decrease in sales in January for most retailers, a major portion of merchants said they believed things will improve.
About 61 percent of retailers surveyed predicted their sales will increase through April, according to the MRA report. Just 19 percent of merchants said they expect sales to decline over the same period and 20 percent anticipated no change. If that holds, that would result in a 64.2 index rating — an increase over January’s prediction Index rating of 57.6.
Some 61 percent of retailers predicted their sales will continue to rise through April and 19 percent said they expect them to fall. Another 20 percent anticipated no change. That results in a 64.2 index rating, a robust bump over last month’s prediction index rating of 57.6.
“It’s also typical to see a roller-coaster effect when sales rise, or fall, drastically,” Hallan said. “However, with optimism over the 60-point line, we’re hopeful to see another solid month of sales in February.”
From Crain’s Detroit Business.