Someone asked me how I can believe Holiday sales increases can be in the 3 to 4% range when I don’t buy the NRF data. The answer is twofold — I am interested in correcting their horrific statistical error, and returning expectations back to baseline (rather than saying Xmas will be lousy this year).

But the main reason for this respectable increase over last year’s robust 6% gains is this chart from Econbrowser ^[1]:
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click for larger chart

^[2]

courtesy of Econbrowser ^[1]

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Gasoline at $3.10 is fatal to low and middle income consumer spending; Now lower that by 30%. You cannot be too Bearish on the holiday shopping revenue numbers with this decrease in consumer energy costs.

As to retail margins amidst all the discounting — thats a different story, one that’s too early to predict on December 1.

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UPDATE December 1, 2005  10:28 am

Jeff Macke of Macke
Asset Management published on Minyanville the following roundup of same
store sales performance in November; There ain’t a whole lot of firms
reporting gains north of 22%:

Download Macke’s Retail Roundup.xls ^[3]