Michigan retailers say theyre faced with significantly higher operating costs because of the same force hurting consumer spending in their stores: higher energy prices.


More than four of every five retailers (83.3%) answered “Yes” when asked in the latest Michigan Retail Index survey: “Are you seeing your recent operating costs rise significantly?” A clear majority (72.3%) said “the most pressure” was coming from higher prices for gasoline or electricity and natural gas.


The monthly Index survey is a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.


“As retailers struggle to sell goods to consumers reeling from higher energy costs, they are also squeezed by the higher costs they must pay to run their stores, make deliveries and ship and receive merchandise,” said James P. Hallan, MRA president and CEO. “In the highly competitive and discount-oriented retail marketplace, retailers dont feel they can simply pass on their higher costs to customers.”


While data from recent Index surveys show more retailers have been raising prices this year, about half have maintained prices or cut them. During July, retailers were evenly split between those raising some prices and those maintaining or cutting prices.


Also for July, the Index showed 38% of retailers increased sales over the same month last year, while 45% recorded declines and 17% saw no change. The results create a seasonally adjusted performance index of 48.1, up from 36.3 in June.


Looking forward, 35% believe their sales will increase for August-October, while 39% forecast declines and 26% project no change. The results create a seasonally adjusted outlook index of 48.5, up from 47.9 in June.


The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation’s largest state trade association of general merchandise retailers.