The numbers are coming in, and so far, the Holiday shopping season is off to a very  respectable beginning. Mall Traffic, retail sales, even dollar volumes are all up. In some areas, improvements have been quite significant. Online sales saw very large gains.

We do notice a variety of contradictions, binary conundrums and footnotes. We know the consumer has been deleveraging, but they are also suffering from Recession fatigue. (We also know that deleveraging is partly due to increased defaults).

Luxe items and high end retailers saw a post-recession improvement long before department and electronics stores, but they too are improving. What this trend means for discounters like Wal-Mart (WMT) and Dollar Stores (FDO, DLTR) has yet to be determined. It would not be a surprise if they failed to keep up with non discount gainers, as our “Retail Slumming” concept of 2007 may be seeing a partial unwind.

The data is encouraging:

• Roughly 212 million shoppers visited a store or website over the weekend, an increase of 8.7% from last year, according to the National Retail Federation (WSJ)

• The average shopper spent $365.34, up 6.4% (WSJ)

• The heavy discounting and lower prices are holding down total retail sales spending in dollar total (AP)

• Black Friday weekend sales rise were estimated at 9.2% to $45 billion (NRF)

• Sales rose only slightly on Black Friday (ShopperTrak). This was attributed to a flurry of pre-Black Friday deals the preceding week

Online sales saw major gains. Part of this is the ongoing 15 year trend towards online retail; part of this reflects improving economic backdrop. The details:

• Sites saw spending up 9% to $648 million on Black Friday (comScore)

• Spending rose more than 14% from Thanksgiving Day through Saturday (IBM’s Coremetrics)

• For the first 26 days of November, online spending rose 13% to $11.64 billion vs 2009 (comScore)

• Thanksgiving Day e-commerce sales, typically a light day, rose to $407 million, up 28%

• ComScore is forecasting E-commerce sales in November and December to rise 11% to $32.4 billion. (Bloomberg)

This is encouraging, but incomplete. Retailers count on November and December for about 20% of their annual profits. Note that December 15-25 is believed to account for 40% percent of holiday business. Will consumers have the strength and the money to continue the momentum?

One last note: Most retail forecasts tend to be way too optimistic. We will find out if this is the year forecasters hit their marks.


Graphic courtesy of WSJ

Graphic courtesy of NYT

Category: Consumer Spending, Retail

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

39 Responses to “Improving Holiday Sales Reflect Economic Recovery”

  1. [...] Retail sales up 6.4% for Thanksgiving weekend.  Gobble gobble.  (Bloomberg) and (TBP) [...]

  2. lyapunov says:

    The average shopper spent $365.34, up 6.4%. OK. But what about profit margin ? Did the actual profit increase in the same proportion ? Aren’t the shoppers looking for deals ?

  3. Discounting appears heavy, but we see more anecdotes this year of splurges and gifts for one’s self.

  4. b_thunder says:

    $648 Million spent online? (that’s Million, not Billion) that’s like… a bit less than 1.45% of the total $45Billion spent. is it even within overall margin of error?


    BR: Thats Black Friday (one day) Online vs total Black Friday weekend sales . . .

  5. Hondo says:

    NRF number are no better than shopper track etc. Nobody know what happened especially after discounts. Traffic counts are really stupid to look at.

  6. Pantmaker says:

    Retail sales clearly being driven by Zombie Shoppers. :)

  7. whskyjack says:

    We went to one of the large furniture/household goods discounters, Nebraska furniture Mart. The electronics dept was a zoo and by the time we got there the deals were gone. The wife wanted to buy a tv for her father. We ended up buying it on line for about $15 bucks more than the super deal. I would have paid more than $15 just avoid the hassle.
    The wife did go out early and shopped for clothes for her and me. I,m an XLT and shirts cheap are rare. She found a bunch at pennies and Kolhs so I’m good for several years. But she didn’t find anything for herself.

    Later we went to walmart for dogfood and stuff. Just regular size crowd but they were wandering the isles making it hard to move around. Checkout was a breeze, rare for that store. Seems like the poor folks were doing more looking than shopping.


  8. whskyjack says:

    According to the wife, on friday if the store wasn’t doing deep discounting then they weren’t busy.


  9. NoKidding says:


    “Roughly 212 million shoppers visited a store or website over the weekend, an increase of 8.7% from last year”


    “The average shopper spent $365.34, up 6.4%”


    NOTHING IS “holding down total retail sales spending in dollar total”

    The statements, as originally written, are innumerate. If more about 9% more shoppers appeared, and if the average shopper spent about 6% more, then sales would increase about 16%.

    What garbage are you peddling here.


    BR: Speaking of innumerate:

    1. You cannot assume that every shopper is spending; some are looking for deals, others merely eyeballing; traffic does not automatically equal spending. There is a high correlation, but it is not 1.

    2. Discounting is holding sales dollar down versus what they might have been without discounting. There is an imperfect correlation between price and sales volume, and we cannot assume that retailers have hit upon the magic revenue maximizing number for discounting (and their job is profit, not rev maximizing).

    3. Understand the difference between median, mean and average. When we get average spending numbers in total dollars, it can easily be skewed by high end (or low end) shoppers.

    4. Note that each data point has a specific source (in parens). These are different firms, with varied methodologies. Some count heads, others use surveys of expectations, still others measure actual sales. They are Apples to Oranges comparisons, and are expected to be inconsistent — by those people who understand data analysis.

    To review, your comment is not only misinformed, but rude to boot. I suggest you learn some manners before attempting to post here again.

  10. daf48 says:

    Hard to believe 212 million went shopping over the weekend. 39 million travelling, 42 million on food stamps, millions unemployed, and millions watching the best football weekend this year. Sounds like more cheerleading to me.

  11. Fitzie says:

    Sounds like cheerleading — unless you look at the data.

    Its pretty obvious to those people who check the numbers that sales were much better than last year

  12. Big Joe says:

    Zombie Shoppers, that’s great!

    Meanwhile, the comments are being overrun with Zombie Bears!

  13. Mannwich says:

    I honestly don’t see how cheerleading the current mirage that is the markets and our Potemkin economic “recovery” is any different than the last Potemkin recover when real-tards constantly cheered and pumped the fraudulent housing market bubble back in the day?

    BR – how is this any different? I’d like to hear it.


    BR: I report the data as find it, and try to contextualize it.

    If you want to know the key differrence, in one case we were heading into a collapse, and in the present we have just come out of one.

  14. Robespierre says:


    Funny that when sale “increases” support your “recovery” you provide percentages and yet when they don’t then you provide just the headline. Are u channeling CNBC?

    “Black Friday weekend sales rise were estimated at 9.2% to $45 billion (NRF)” vs “Sales rose only slightly on Black Friday (ShopperTrak). This was attributed to a flurry of pre-Black Friday deals the preceding week”

    A more balanced bullet should have been:
    “CHICAGO – November 27, 2010 – The traditional kick off to the holiday shopping season provided mixed messages to retailers as Black Friday sales showed a very slight increase over last year despite record spending for the day 0.3 percent increase versus the same period in 2009. ”

    Anyway, I think sales of high ticket items where strong on “banking” states (NY for example) and low or flat on the rest of the USA states. This tells the tale of the “recovery”


    BR: That’s not at all how I see it.

    Sales are up big across the full month, and the full holiday weekend. That is the major trend. A single data point — Sales on Black Friday — was soft. However, the change in retail store hours (Open Thanksgiving!?), and the earlier Black Friday discounts that week, easily explains the single datapoint. YOU seem to be the one who is ignoring the majority of data to focus on flat Black Friday sales.

    Is it confirmation bias to contextualize the one outlier datapoint, or to focus on it ?

  15. dead hobo says:

    Mannwich Says:
    November 29th, 2010 at 9:59 am

    BR – how is this any different? I’d like to hear it.

    To me, it comes across as a lot of people think ‘the beginning of a recovery’ = a pot of gold on the front porch for everyone left by a leprechaun, 5% unemployment, and all housing equity returned to 2006 values. Immediately. Otherwise, any talk of a recovery beginning is just wall street hokum.

    It doesn’t work like that. The recovery with respect to employment will roughly be symmetrical to the unemployment preceding it. A frequently posted graph here suggests this is almost a certainty. In other words, for most of the months ahead, the following month will be better than the current month. When employment improves, everything else will improve commensurately. Even housing, although it will take a decade or more before we see another housing bubble.

    With respect to the stock market, anything involving China and India will go up because you have a couple billion people who are quite backwards there who want to catch up to their more affluent countrymen. Commodities will be pressured upwards as a result. Europe will soon figure out how to solve their debt problems and their economy will return to a more historical course. Even the decadent and lazy US might learn the value of effort and education and start with the innovation and creativity it has shown frequently. All of this takes time, Leprechauns have nothing to do with it.

    There will not be a major sell off because there are no major sellers left. Low volume and slack buyers are the only enemy now.

    Wall Street and the pundits who support them are probably a little confused because a lot of the insider crap they used to take advantage of is going away. Now they have to actually take risks like the rest of us and they are scared about it. This means the return of a healthy market, as opposed to the situation of the past couple of years where everyone was on the same side and everything always went up, thanks to the Fed and trader’s inside knowledge of secret manipulations. Even HFT is starting to take on the appearance of a vending machine, as opposed to a flash trader.

  16. dead hobo says:

    Oh yes, and employment has turned the corner and it now on the permanent upswing.

    As employment goes, so goes retail and so goes the rest of the economy. And most people really don’t give a fiddly-fuck about what you, me, and other write about this situation. Or how Europe handles Irish debt. The invisible hand will do what it has always done.

  17. maddog2020 says:

    Is the National Retail Federation the same as the National Association of Realtors©?

    Srsly, where did 60 million more shoppers come from since 2005 (the height of the housing bubble)? I’m gonna assume that if I visited 5 websites, I was counted as 5 Americans. Sorry, I’m too lazy to look at their methodology.

  18. louis says:

    How much is pent up demand? You know take away the junkie’s stash and then let him dabble again.

    How much is a result of more renter’s on the scene with lower housing payments?

    Curious to know how the underwater crowd is spending the Holiday shopping season.

  19. Pent up demand is probably most of it

    Lower housing payments is some (I suspect the underwater crowd is more cirucmspect)

    The defaulted crowd, despite not paying mortgages, have a huge overlap with the unemployed. They are not very big participants in this . . .

  20. Joe Friday says:

    BR: “Note that December 15-25 is believed to account for 40% percent of holiday business”

    Ya beat me to the point I was about to make.

    We shall see.

  21. Robespierre says:

    BR: That’s not at all how I see it.

    “Is it confirmation bias to contextualize the one outlier datapoint, or to focus on it ?”

    My point was that you are showing bias when you de-emphasize bad data points in favor of good data points. BTW I do not believe that the “world is about to end” not because I believe in a recovery but mostly because all industrialize central banks have decided to support every single big (or important) economy and industry regardless of future cost. That by itself puts a floor on all stock and bond markets.

  22. Ahh, now I understand.

    I am totally biased. Everything i write is based upon my interpretation of data, facts, trends, overall psychology.

    I try to have a bias free process — the methodology is more important than any single opinion — but the output is blessedly, decidedly informed bias.

    Sure, it may be based on data, but it is by purpose an opinion.

  23. Julia Chestnut says:

    I’m still waiting to see how this shakes out. While I was more liberal than last year – it would be hard not to be, considering I made most of the gifts last year – I was pretty focused on things that were (1) necessary, and/or (2) very discounted. Last year, I didn’t have the luxury of putting the “or” in that sentence.

    But I’m concerned that we saw a big inventory upswing, and then we’ve already seen less than stellar sales on fairly deep discounts. While the stores are getting more clever – rolling sales of different items to get the foot traffic (and incidental purchases) up – I am not sure how this will all translate on the bottom line.

  24. Arequipa01 says:

    Is it possible that Mr. Ritholtz’s interpretation of the data is correct and that there is improvement in the ‘economy’, AND that the equity markets will suffer?

    Here is an interesting tidbit out of the Peruvian Mining and Energy Ministry:

    Translation (a quickie so eat me if I am mistaken):
    Peruvian production of gold was 13,050,468 fine grams in October 2010, 13.48% less than October 2009, the MEM stated today.
    This decrease is explained by Barrick’s Misquichilca (-54.87%), Arasi (-40.96) and Yanacocha [NEM] (-30.33%), asserted the MEM.

    La producción peruana de oro fue de 13 millones 50,468 gramos finos en el mes de octubre del 2010, menor en 13.48 por ciento en comparación a la reportada en el mismo mes del 2009 (15 millones 83,866 gramos), señaló hoy el Ministerio de Energía y Minas (MEM).

    Este descenso se explica por la menor producción de Barrick Misquichilca (-54.87 por ciento), Arasi (-40.96 por ciento) y Yanacocha (-30.33 por ciento), explicó la Dirección General de Minería (DGM) del MEM.

  25. Thanksgiving Weekend Sales Rise as Shoppers Nab Deals

    The average shopper in the U.S. spent 6.4 percent more over Thanksgiving weekend than last year as more people picked up jewelry and toys, heartened by the economic rebound.

    About 212 million shoppers went to stores and websites over the holiday weekend, on average spending $365.34, the National Retail Federation said yesterday. The proportion of sales online rose to more than one-third of the total, the highest ever, according to the Washington-based trade group.

    Retailers lured people into stores with promotions like Wal-Mart Stores Inc.’s $5 Barbie and J.C. Penney Co.’s $10 diamond-accented earrings. Customers such as Barb Capa, shopping at Saks Inc.’s flagship store yesterday in New York, said they’re ready to buy again as their fortunes improve.

  26. NoKidding says:

    If the average spending per customer increases by 6% and the number of customers increased 9% then the total spent increased by 16%. That is math.

    Sorry for the uncalled for rudeness, but the math is right.

    Average spending equals total spending divided by total population. You can’t increase total population and average spending without increasing total spending by more than the sum of the two gains. I know math.

    I also see that the two gains reported relate to slightly different populations. Mixing data that way is how to construct an analytical sounding fib.

  27. Your math is correct, your data analysis is off.

    These guys do a nice job explaining how the traffic can go up, and how a few big spenders skew the data.

    Holiday Shopping Season: The Haves vs. the Have-Nots

  28. [...] shopping season is off to a decent start.  (WSJ, Money Game, Big Picture, Atlantic [...]

  29. Robespierre says:

    @Barry Ritholtz Says:

    “Sure, it may be based on data, but it is by purpose an opinion.”

    My issue has to do in how you present the facts not you opinion. While you have no problem quoting the %9.2 increase from NRF, you didn’t do the same (0.3% increase) as reported by ShopperTrak. Moreover, the quote you decided to put is the one that says “This was attributed to a flurry of pre-Black Friday deals the preceding week” which validates your opinion. Now, why would you do a thing like that?


    BR: I grabbed what i thought was a representative sample of data points from WSJ, Bloomberg, AP, NYT. I used the data to tell a narrative. This was not an attempt to do an exhaustive review of all the data (that would be boring).

    If you think you can do better, i suggest you present your case, rather than nitpicking.

  30. Mannwich says:

    Good video link, BR. Let the Bifurcated “recovery” and economy roll onward instead of truly fixing the problems that ail the country. I guess if one continually receives “easy money” (Wall Street bailouts), then it makes sense to just spend your ass off. Easy come, easy go, right? Sounds like a really great way for a lasting “recovery” to take hold. Um, I think not.

  31. Petey says:


    I cannot argue with BR’s approach — his analysis often surprises me, and he turns out to be a whole lot more right than wrong. He is not backwards looking, and does not go with the crowd, unless that is to ride a trend.

    You are missing the big picture here. Sales improved period. Stop wishing for a retail disaster and economic collapse.

    If you want relentless negativity, go to Zero Hedge.

  32. [...] far so good. But FusionIQ CEO Barry Ritholtz says be careful not to draw vast conclusions from preliminary Black Friday sales. Not only do November [...]

  33. Its funny people read these comments as being too Bullish — Dow Jones Market Talk‘s takeaway was that I was being cautious:

    But FusionIQ CEO Barry Ritholtz says be careful not to draw vast conclusions from preliminary Black Friday sales. Not only do November and December account for about 20% of retailers’ annual profits, but the Dec. 15 to 25 period makes up about 40% of total holiday sales.

    “Will consumers have the strength and the money to continue the momentum?” Ritholtz ponders. “One last note: Most retail forecasts tend to be way too optimistic. We will find out if this year is the forecasters hit their marks.”

    I wonder what it says about public opinion that so many people read this as blind cheerleading . . .

  34. dead hobo says:

    Barry Ritholtz Says:
    November 29th, 2010 at 3:25 pm

    I wonder what it says about public opinion that so many people read this as blind cheerleading . . .

    It means they’ve already scratched their eyes out. Jesus, please take me now.

  35. Bill W says:

    Where I live (Massachusetts), I feel like the animal spirits were alive and well. I went to a Target with my wife to do some shopping for necessities. I had to fight through a crowd of people to get to the toothpaste. A lot of families and groups of friends out shopping.

    Before I head into hibernation like the zombie bear that I am. I do have a couple of bearish thoughts.
    1. I don’t think increased foot-traffic will lead to increased sales like it has in years past. (Think bargain hunting)
    2. I wouldn’t be surprised if sales are slower going forward. In other words, it will average out and we’ll end up with a gain over next year, but nothing spectacular. The bargains brought people out early.
    3. I’m not surprised that online sales are up year over year. More people are doing it. I would expect online sales to increase even if total sales were down. Free two day shipping on Amazon kicks butt.

  36. In a Holiday Indicator, Retailers Say Online Sales Remain Strong

    Online shoppers started buying on Thanksgiving and did not let up on so-called Cyber Monday, the day retailers designated for more discounts and promotions. By 6 p.m. on Monday, Eastern time, sales were 20 percent higher than during the same time period on the Monday after Thanksgiving a year ago, according to Coremetrics, a research firm owned by I.B.M. that tracks online sales.

    Cyber Monday was created five years ago to encourage people to shop online from work, where they could use a high-speed Internet connection that they lacked at home. It never was the busiest online shopping day. But now that broadband Internet connections have replaced dial-up access in most American homes, fewer consumers are waiting until they get to their work computers to shop online.

    The day has evolved into a way for online retailers to keep up the spending momentum that began in earnest on the day after Thanksgiving., the online arm of the National Retail Federation, a trade group, said that the percentage of people shopping online from work on Monday was expected to drop more than one percentage point from last year, to 12.1 percent.

    “We saw a lot of companies jumping the gun by doing a Thursday-only sale,” said Charlie Graham, the founder and chief executive of, a personal shopping site that works with more than 200 retailers. “There are still some retailers who did a different deal on Friday than on Monday,” Mr. Graham said, “and you’ll see retailers who put a deal up Thursday through Monday.”

  37. monkeylove says:

    That’s actually the recent history of the U.S. economy: four decades of trade deficits with economic “recovery” purchased through increasing debt, with economic “growth” based on consumer spending.

  38. [...] Improving Holiday Sales Reflect Economic Recovery (November 29th, 2010) [...]