Association reports May retail sales rise slightly over April

Michigan retailers reported a slight increase in May sales over April, continuing the positive overall sales growth trajectory that began in November 2020. Furthermore, according to a recent survey conducted by the Michigan Retailers Association (MRA) of its members on the effects of the pandemic, 31% reported that sales are outperforming pre-pandemic sales and more than half (57%) believe business continues to rebound.

The May Retail Index survey came in at 68, a slight increase from April’s 67. Seventy percent (70%) of Michigan retailers reported an increase in sales over April; 19% reported a sales decline; and 11% reported no change. The categories experiencing the largest gains include department stores, home furnishings, and personal services.

The seasonally adjusted performance Index is conducted by 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; the higher the number, the stronger the activity.

—Optimism continues; retailers concerned about labor, inventory, and potential price increases

Sixty-three (63%) percent of retailers predict their sales will continue to rise throughout the summer months; 14% said they expect a sales decline; and 23% anticipate no change. That results in a 74.8 three-month expectation index rating that is on track to what was first reported last month. 

“We are excited to report that Michigan retailers continue on a positive upward sales trend that we expect to continue throughout the summer months to coincide with the rebound in tourism,” said Bill Hallan, and CEO of Michigan Retailers Association. “Labor shortages and inventory slowdowns continue to concern retailers, and a number of them cite possible price increases from manufacturers and suppliers as they procure inventory for the holidays. This is an area we’ll be watching.”

According to MRA’s most recent member survey measuring the effects of the pandemic, 60% of retailers are experiencing supply chain issues with 50% of them expecting shortages to continue through the rest of the year.  Over the course of 2020, small retailers across Michigan added new shopping methods such as e-commerce platforms, Facebook shopping, and curbside service in an attempt to keep customers. Sixty-seven percent (67%) plan to keep new services in place, as many reported that customers appreciate the convenience.

“As the state rescinded emergency orders on June 22 and retailers return to full capacity, we will see how businesses adjust to managing more customers with less help,” said Hallan. “Many plan to keep limited store hours until they can hire more employees.”

The National Retail Federation recently reported that it adjusted its 2021 retail sales forecast to be between $4.44 trillion to $4.56 trillion nationwide (non-store and online sales), a growth between 18% and 23% over last year as consumers continue to utilize e-commerce.