Tagged: retail

Michigan retailers are becoming more concerned about the impact rising gasoline prices will have on sales.

Michigan’s average gas price leaped over four dollars a gallon this week.

The Michigan Retailers Association released a survey Wednesday showing lower sales projections over the next three months.

Tom Scott is with the Michigan Retailers Association.   He says rising gas prices will force retailers to spend more to ship their products and discourage customers from coming into their stores.

“Gas prices are always a concern," says Scott, "And when they spike up like that…it’s a bigger concern.” 

Michigan’s average price for a gallon of gas is just under $4.10, according to Gasbuddy.com. 

A organized crowd of people swarmed a local business in downtown Grand Rapids as part of an effort to buy local this holiday season.

Dozens showed up at the same store at the same time for the event, called a “cash mob”. It was organized by the Grand Rapids Area Chamber of Commerce. Each person pledged to spend at least $20. Which store the cash mob goes to remains a secret until just a few hours beforehand.

“It’s a new spin on long time mission for the chamber of bringing exposure to local businesses,” said GRACC President and CEO Rick Baker. Baker says they heard about the idea from Cleveland.

The cash mob targeted retail incubator, MoDiv; a single storefront with nine generally new, small retail businesses inside.

Strangers have paid off more than 30 layaway bills at a Kmart near Grand Rapids in the last week.

Dan Veenstra has been working there for more than 20 years and says he’s never seen anything like it.  “In the past we’ve had people come in that want to pay on somebody’s layaway - it’s usually a friend or neighbor or a family member. But it’s never been strangers like this,” Veenstra said.

Michigan retailers say 4 dollar a gallon gasoline is taking a bite out of their business.  The latest survey by the Michigan Retailers Association says state businesses saw a marked decline in sales in March, as gasoline prices started to soar.    Michigan retail sales slumped to their lowest level since last July. 

Tom Scott is with the association.  

“Definitely disappointing.  No doubt about that, because we were on a real nice upswing and getting some momentum going in positive territory.  And then for March to come along…that is a little bit of a setback.”

Consumers spent more on retail goods in the first quarter than they did during the same time last year. That's despite higher gas prices, bad weather and a late Easter holiday.

Luxury retailers were the winners.

Retail analyst Marshal Cohen says the recession has left the consumer with "frugal fatigue."

"We're tired of being so frugal with what we're spending and at the least expensive place," he says.

A bunch retailers released their first quarter numbers this week.

High end fancy stores such as Saks Fifth Avenue, Bergdorf Goodman, Neiman Marcus and Nordstrom all made money.

But Gap Inc., which owns the Gap, Old Navy and Banana Republic chains, was down 10 Percent.

Rising gasoline prices threaten to take some of the optimism out of a rosy new forecast for retail sales in Michigan.  A recent survey of Michigan retailers finds 76% expect to see their sales improve this spring. 

  Good holiday sales are lifting many business owners expectations for the year ahead. 

Tom Scott is with the Michigan Retail Association. Scott says the survey was taken before gasoline prices spiked this week.   He says high gas prices could be a problem for retailers.

 “But the bigger concern, more than just their own delivery trucks, is generally the effect on consumers.  And of course, every dollar a consumer puts in his or her gas tank is a dollar that can’t be spent at the store.”

Scott says a few years ago when gas prices reached four dollars a gallon, retail sales dried up.  But he says pent up consumer demand may keep the customers coming, even with high gas prices.