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1st Quarter Projections Rise
More Michigan retailers project January– March sales will be as good or better than the first three months of 2015. Page 3
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Chip Cards Update
Data gathered in the months since credit card liability shifted begin to show the extent of credit card fraud. Page 7
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Flint’s Reminder
Toxic waste usually isn’t associated with retail, but retailers are not immune from environmental regulations. Page 9
® February 2016 Vol. 41 No. 1
Warm weather a culprit in cooler holiday sales across state and nation (Also see Page 3) Unseasonably warm weather helped push Michigan retailers’ holiday sales below forecasts. Sales increased 0.4 percent over the 2014 season, despite retailers’ forecasts of a 2 percent rise, according to the latest Michigan Retail Index survey, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago. Although sales did grow, the modest increase was disappointing in light of several factors that had pointed to a more robust season. The combination of lower gasoline and home heating prices, reduced unemployment and stronger consumer confidence pointed to stronger sales. But warm weather and lack of snow hurt sales of winter apparel, other winter merchandise and holiday recreation. As an example, only 20 percent of Northern Michigan retailers increased sales during December, compared to 60 percent the previous December. Deep discounts, more mobile shopping and going up against strong figures from last year also hurt performance. In 2014, 52 percent of Michigan retailers reported increases in holiday sales. That slid to 45 percent this past season. Similar Pattern Sales across the nation showed a similar pattern by coming in below projections. U.S. holiday sales rose 3 percent – below preseason forecasts of 3.7 percent – the National Retail Federation reported. For the holiday season, 45 percent of Michigan retailers reported yearto-year increases, while 34 percent experienced declines and 21 percent said sales were flat. Continued on page 6
The official publication of Michigan Retailers Association
www.retailers.com
Big events shaping Capitol agenda Crisis issues, such as fixing the Flint water system and dealing with the severe financial problems of Detroit Public Schools, will help determine what happens to the list of tax and regulatory issues facing retail in the
Michigan Legislature in 2016. Governor Rick Snyder spent most of his State of the State Address on January 17 focusing on the Flint water situation and Detroit schools’ finances.
Traditionally, a governor uses the address to put forth a long list of initiatives he wants the legislature to enact during the year. Not this year. Those two issues, plus other priorities for legislative leaders – including major changes to no-fault auto insurance – mean this year’s agenda could be far different from 2015, when retail achieved two major victories and a host of smaller ones. For good measure, it is also an election year for all members of the Michigan House of Representatives, as well as a presidential year. Upcoming elections always affect what lawmakers do in the months leading up to November – including leaving issues until the sometimes wild lame-duck session Continued on page 4
Chip & PIN adds greater security
Company Roots The company’s roots were plant-
Credit cards using a chip and PIN (personal identification number) are more secure than those with a chip and signature and provide better protection for retailers and their customers. That’s why MRA believes Chip & PIN should be the standard in the U.S., as it is in much of Europe and the rest of the world, MRA told state lawmakers exploring the issue. The House Financial Services Committee held an informational hearing on January 20 to discuss the differences between new credit cards issued with a chip and a signature (Chip & Sign) vs. those with a chip and a PIN (Chip & PIN). MRA was invited to testify. U.S. card issuers are issuing primarily Chip & Sign cards, which include the chip microprocessor and are authorized by the card owner’s signature rather than a PIN. In Chip & PIN, the four-digit PIN serves as a second level of encrypted protection, making it more difficult to guess or duplicate a PIN that is unique to the card owner than it is
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Members of the second generation of family owned and operated English Gardens display the IGC Retailer of the Year Award at the Royal Oak store. Pictured are: (front row from left) Bob Walker, Lynette Walker, Linda Vespa Yugovich, Val Vespa, Rick Vespa; (back from left) Frank Janosz, John Darin, Debbie Lowman, Dean Darin, Johnny Darin.
Garden retailer’s award rooted in customer care by Doug Henze Surviving and thriving for 60 years is no small feat for any business, but John Darin couldn’t make success sound simpler. “It was always about listening to the customers,” said the president of gardening center retailer English Gardens, headquartered in West Bloomfield. “We’d listen and figure out what they wanted and go out and
get it for them.” That philosophy helped Darin’s family grow the company from the single Dearborn Heights location it acquired in 1954 into a six-store operation with annual sales just shy of $30 million. It also recently earned English Gardens the top award in its industry – 2015 Retailer of the Year from Independent Garden Centers (IGC). IGC is the world’s largest trade show and conference for independent garden center owners, managers and buyers.