Subzero Temperatures Put Chill on Michigan Retailers’ January Sales

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After experiencing consistently subzero temperatures throughout January, and the snowiest month on record in metro Detroit, Michigan’s retailers project a 1.4 percent increase in sales this year, says the most recent Michigan Retail Index, a joint project of the Michigan Retailers Association and the Federal Reserve Bank of Chicago.

“When you have a big snowfall, a sort of isolated event, it may close stores or close the mall, or keep people in the house for a day or even a weekend — a lot of those sales will come back,” says Tom Scott, spokesman for the Michigan Retailers Association. “But when you have the prolonged subzero temperatures and heavy snow, week after week, it’s not a matter of those sales coming back in just another day or two. Losing a month (of sales) is a very big blow.”

The January survey showed 30 percent of retailers increased sales over the same month last year, while 46 percent recorded declines, and 24 percent reported no change. The results create a seasonally adjusted performance index of 42.5, down from 50.5 in December. A year ago, the January index was at 57.9. (Index values more than 50 generally indicate positive activity, say association officials.)

Considering February’s weather has been comparable to January’s, Scott says he expects the next index will show similar trends. “We know the weather will improve, and when it does, there will be pent-up demand. My guess is we’re going to see some stronger sales once spring hits. But again, it’s hard to make up for an entire month of (tepid) sales,” Scott says.

Looking forward, 45 percent of retailers expect sales during February-April to increase over the same period last year, while 20 percent project a decrease, while 35 percent see no change.

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