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No, Black Friday Sales Were Not Up 16% (not even 6%)
Posted By Barry Ritholtz On November 28, 2011 @ 7:00 am In Consumer Spending,Data Analysis,Really, really bad calls,Retail | Comments Disabled
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%).
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)
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2011/11/no-black-friday-sales-were-not-up-16-not-even-6/
URLs in this post:
 exception: http://online.wsj.com/article/SB125936736754367317.html
 statement: http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1260
 Surveys where people forecast their own future spending: http://http//www.ritholtz.com/blog/2007/10/repeat-after-me-spending-surveys-are-meaningless/
 More To Holiday Sales Than A Few Phone Calls: http://www.ritholtz.com/blog/2005/11/more-to-holiday-sales-than-a-few-phone-calls/
 There They Go Again: NRF Redux: http://www.ritholtz.com/blog/2006/07/there-they-go-again-nrf-redux/
 More Bad Data from the NRF?: http://www.ritholtz.com/blog/2006/11/more-bad-data-from-the-nrf/
 Repeat After Me: Spending Surveys Are Meaningless: http://www.ritholtz.com/blog/2007/10/repeat-after-me-spending-surveys-are-meaningless/
 How Good Were Holiday Sales Really?: http://www.ritholtz.com/blog/2008/01/how-good-were-holiday-sales-really/
 Spinning Black Friday Retail Sales: http://www.ritholtz.com/blog/2008/12/spinning-black-friday-retail-sales/
 Entering the Holiday Shopping Season (Beware Surveys!): http://www.ritholtz.com/blog/2009/10/entering-the-holiday-shopping-season-beware-surveys/
 We Don’t Know How Black Friday Sales Were Yet: http://www.ritholtz.com/blog/2009/11/we-dont-know-how-black-friday-sales-were-yet/
 In Stock! Bad Holiday Sales Forecasts: http://www.ritholtz.com/blog/2009/11/in-stock-bad-holiday-sales-forecasts/
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