If its the Monday after Black Friday, then its national hype the fabricated data day!

Every year around this time, we get a series of loose reports coincident with Black Friday and the holiday weekend. Each year, they are wildly optimistic. And like clockwork, the media idiotically repeats these trade organizations spin like its gospel. When the data finally comes in, we learn that the early reports were pure hokum, put out by trade groups to create shopping hype. (Yes, the Media ALWAYS screws the pooch big time on this one, with the occasional exception).

Let’s start with this whopper from an utterly breathless press release from the National Retail Federation:

“U.S. retail sales during Thanksgiving weekend climbed 16 percent to a record as shoppers flocked to stores earlier and spent more, according to the National Retail Federation.

Sales totaled $52.4 billion, and the average shopper spent $398.62 during the holiday weekend, up from $365.34 a year earlier, the Washington-based trade group said in a statement today, citing a survey conducted by BIGresearch. More than a third of that — an average of $150.53 — was spent online.”

No, retail sales did not climb 16%. Surveys where people forecast their own future spending are, as we have seen repeatedly in the past, pretty much worthless.

We actually have no idea just yet as to whether, and exactly how much, sales climbed. The data simply is not in yet. The most you can accurately say is according to some foot traffic measurements, more people appeared to be in stores on Black Friday 2011 than in 2010.

Another absurd example: Does any one actually believe “nearly one-quarter (24.4%) of Black Friday shoppers were at the stores by midnight on Black Friday”? Perhaps the NRF competing with the NAR for title of most ridiculous trade group.

Next up is ShopperTrak, who claimed a 6.6% gain in sales:

“Shoppers packed stores and spent money in record numbers on Black Friday, early surveys show, a phenomenon that analysts call a hopeful sign for the U.S economy after months of up-and-down consumer spending.

Black Friday sales were up 6.6 percent over last year and foot traffic in stores was up 5.1 percent, according to ShopperTrak, a Chicago-based research firm. The year-to-year spending increase was the greatest since 2007, the firm reported . . .”

What is the basis of that 6.6% gain? ShopperTrak “uses equipment installed in stores to measure traffic.” But that does not measure changes in window shoppers vs buyers from year to year, how much money and or credit people have, how large their holiday budgets are, or how much they are willing to spend. It is a very poor system for forecasting actual sales.

The fact that NRF and ShopperTrak are so widely disparate confirms for us at least one of their methodologies are suspect. In my opinion, both are mostly meaningless.

Here is my challenge to the CEOs of the National Retail Federation and ShopperTrak: $1,000 to the charity of the winners choice that your forecasts for Black Friday, the Thanksgiving weekend and the entire holiday shopping season are wildly off. I bet you your forecasts miss the mark by at least 10%-20% (though I believe its closer to 40-50%).

>

Previously:

More To Holiday Sales Than A Few Phone Calls (November 28th, 2005)

There They Go Again: NRF Redux (July 28th, 2006)

More Bad Data from the NRF? (November 2006)

Repeat After Me: Spending Surveys Are Meaningless (October 2007)

How Good Were Holiday Sales Really? (January 10th, 2008)

Spinning Black Friday Retail Sales (December 1st, 2008)

Entering the Holiday Shopping Season (Beware Surveys!) (October 28th, 2009)

We Don’t Know How Black Friday Sales Were Yet (November 28th, 2009)

In Stock! Bad Holiday Sales Forecasts (November 30th, 2009)

Category: Consumer Spending, Data Analysis, Really, really bad calls, 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.

22 Responses to “No, Black Friday Sales Were Not Up 16% (not even 6%)”

  1. [...] ridiculous thing on Black Friday? Probably the breathless reporting. The next most ridiculous thing was the statistical reporting. I think that Barry is probably right. Hope an exec takes him up on his $1000 challenge. Safe to [...]

  2. tball says:

    Actually, being within 10-20% in this sort of estimation would seem like a success to me. But I agree that these numbers should not be taken seriously, no matter how close or far off the estimates turn out to be. The process is screwy so the results don’t matter.

  3. BusSchDean says:

    Yeah…your money is safe, Barry. Having worked at a trade association for a couple of years I can say that your take on their desire for accuracy is spot on.

  4. Moss says:

    It must be the pent up demand for pepper spray.

  5. [...] actual numbers, business profitability and discerning the real issues and facts. I line up behind Barry Ritholz and don’t think much of Black Friday yet. It remains to be seen what people bought, and what [...]

  6. Petey Wheatstraw says:

    Regardless of the validity of the numbers published by the various trade group propaganda mills, even if every person in the US (including the unemployed, underemployed, and overly-indebted), had flocked to the malls and maxed-out their credit cards on crap manufactured by Chinese peasants (playing the part of Santa’s elves), it wouldn’t be a good thing for our moribund economy.

    Unless Xmas shopping drones/consumers are using cash on hand (perhaps the money they have recently been reported to be “saving”), for their purchases, we will either see austerity reflected in holiday spending or we will witness the planting of the seeds of future defaults and additional systemic damage.

  7. Mark Down says:

    Laying down 1g …Stick out your chest and make it 100g!

  8. dead hobo says:

    So the pictures on TV of filled up parking lots very early Friday morning were just photo shop? Shit. Had I only known I would have picked up some cheap stuff without feeling like a line waiting goofball.

    ~~~~

    BR: Do you believe 1 in 4 Black Friday shoppers were out at midnight?

  9. Mark Down says:

    BR, is peeing down our legs and telling us it’s raining!

  10. [...] –Black Friday Skepticism: Barry Ritholtz notes that early Black Friday numbers should be taken with a grain of salt. “No, retail sales did not climb 16%. Surveys where people forecast their own future spending are, as we have seen repeatedly in the past, pretty much worthless. We actually have no idea just yet as to whether, and exactly how much, sales climbed. The data simply is not in yet. The most you can accurately say is according to some foot traffic measurements, more people appeared to be in stores on Black Friday 2011 than in 2010.” [...]

  11. pintelho says:

    I will say this. I never went shopping after eating turkey until this year. I didn’t buy anything large but a few $5 toys at Walmart.

    Why did I go? Because I didn’t have to wait out in the cold. They were open and the deals were on before some ungodly hour.

    So the retailers (or I should say SOME retailers) got it right by putting the sale priced items out sooner and letting people actually enter the store and wait inside (when necessary).

    If you are waiting inside Walmart for some price to change to a door buster special..you are likely to spend more. I don’t know how much more but the longer you are in a store the longer that damned consumption devil on your shoulder tells you to buy things you don’t need.

    However, I do not think it translates into a giant bump…and really NAR? $52 billion spent? How much of that actually stays in the US and of course what is $52 billion in a $15 trillion economy?

    Not much of a bump for the economy if you ask me…and not likely to be a harbinger of a better xmas shopping season.

    if I didn’t need the 1k I’d join you BR on your bet.

  12. realgm says:

    The news of the record sales was too good to be true. Great analysis here, Barry.

    When I saw the headline of the Black Friday sales, I was shocked to see how much the Americans are still spending with the amount of debts. Your analysis made perfect sense.

    I wonder how the market would react when people realize those figures were crazily optimistic and may even just be a marketing tactic to encourage people to buy.

  13. Joe Friday says:

    BR: “Perhaps the NRF competing with the NAR for title of most ridiculous trade group.

    They would really have to step-up their game, as the NAR still holds the Gold Medal.

  14. rktbrkr says:

    NFR,NAR…any sales group is going to hype things up, it’s in their blood.

    At least in the northeast (and probably midwest) the weather was unseasonably nice and I suspect that pumped up the foot traffic – but that doesn’t equal a lot more sales.

    Whenever there is bad weather thats quickly trotted out as an excuse for lost sales of all types bu the reverse isn’t true. The NAR will never say new home starts were up X% but that was due to unseasonable weather.

    “…where seldom is heard a discouraging word…”

  15. ES says:

    Parking lots in front of old navy and target where packed on Saturday, stayed clear of those. The mall (macy’s) on Sunday barely had any people at all, I saw no deals to get excited about. I bought some cosmetics for the family as a present and that was all the shopping I did. I am quite proud of myself.
    I think the fact that there is so much traffic around cheap retailers vs. malls shows you were we are heading.
    Last time I was at the mall on the Thanksgiving weekend (in 1998) there were no parking spots to be had . So, don’t believe the hype. US economy is much worse than in 1998. ))

  16. Paddy Megroyn says:

    I’ve heard that readers of this blog have enjoyed this post 15% more than the previous ones.

  17. VennData says:

    Don’t bet BR, I had to take out a second to pay him off.

    - Lawrence Yun

    P.S. it’s in work out.

  18. BC says:

    Black Friday also benefited from lousy weather in 2010. 2010 was depressed because of awful weather and was only up slightly from 2009.

  19. [...] all this could be just another wad of bullshit — Barry Ritholtz at The Big Picture says: If it’s the Monday after Black Friday, then its national hype the fabricated data day! [...]

  20. [...] Last month, I published a post on the nonsense that is Black Friday sales (No, Black Friday Sales Were Not Up 16% (not even 6%). [...]

  21. [...] initial pushback was due to the widely touted shopper survey from the National Federation of Retailers, whose annual idiocy manages to fool journalists and mislead the public each [...]