Snow, cold to blame for lower sales in January

The drop in temperatures coincided with a drop in retail sales in the first month to start 2019, according to the monthly Retail Index survey that Michigan Retailers Association (MRA) conducts in cooperation with the Federal Reserve Bank of Chicago's Detroit branch.

January sales typically decrease compared to December sales. But this year, they also decreased from a year ago, largely due to the weather. The seasonally adjusted performance index of 42.1, showed a slight decrease from January 2018's 42.5.

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.

The January survey showed that 28 percent of respondents reported sales increases over December. Sixty-three percent of retailers recorded declines in January and nine percent reported no change.

"January was a tough month. Retailers were affected by heavy snow and blistering cold temperatures, especially at the end of the month," said James P. Hallan, MRA president and CEO. "We're eager for spring's arrival on March 20."

The Retail Index shows that 69 percent of Michigan retailers expect strong sales through April, while six percent predict a decrease; 25 percent expect no change. That results in an adjusted outlook index of 75.6 a strong prediction for upcoming months.

"Even though the weather hasn't cooperated, consumer confidence is still going strong," Hallan said. "We just need to get through this crazy winter weather."

Retailers were also asked if they expect their overall 2019 sales to increase or decrease. Twenty-nine percent said they expect to see their overall sales rise more than five percent, while 14 percent expect no change. Forty-one percent predicted their sales will increase by zero to five percent. Five percent of retailers predict their sales to decrease more than five percent.

According to the National Retail Federation, retail jobs increased by 15,000 in January. Average hourly earnings rose 3 cents over December to $27.56. A year ago, the average hourly earning was $26.71.

The state Senate Fiscal Agency showed that January 2019 sales tax receipts totaled $678.1 million, a 0.9 percent decrease over January 2018.

Published: Wed, Feb 27, 2019