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%). That evolved into a Washington Post article, Did Black Friday save the season? Beware the retail hype.

Today, we learn that many breathless forecasts from NRF to ShopperTrak were so much hot air and empty hype: Sales were flat to up only modestly. Total U.S. retail sales in November gained only 0.2%, following a 0.6% October. Even that month was revised downwards.

Retailers themselves may pay the price for their massive discounting: Not only might their quarterly earnings be affected by the margin pressure, but they continually train investors shoppers to hunt for discounts. Retail therapy and sport shopping are being replaced by extreme couponing and sites like Living Social and Groupon.

We are left to ponder what those folks who were lining up late at night at Wal-Mart and Best Buy for bargains were doing. No, it was not a sign of “shopping enthusiasm,” it was a sign of extreme economic distress. No one who can afford otherwise goes out Thanksgiving night to stand in the cold with a crowd, to fight the stampeding, pepper-spraying mob for a discounted X Box.

Here is your simple formula:

Thanksgiving Thursday night shopping + record food stamps = Bad Economy

Won’t someone please call the NRF and tell them to STF up?
>

See also:
Retail Sales in U.S. Climbed Less Than Forecast (Bloomberg)

U.S. retail sales rise slightly in November (Marketwatch)

Category: Consumer Spending, Data Analysis

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.

30 Responses to “Retail Sales Disappoint on False Black Friday Reports”

  1. Francois says:

    The 0.1% has no problem shopping, therefore the economy is banging baby!

    That is the prevalent thinking in the corridors of power, elite media and wealth, the only ones that matters, as long as the 99% keeps fighting among themselves.

  2. smedleyb says:

    Kudos Barry for being way out in front of this headline.

    Just another reason in a list of many why TBP continues to be a must read for any serious investor/trader.

  3. constantnormal says:

    Does this data include web sales, or is it strictly a measure of traditional retail sales? If web sales are not included, and it is only same-store data, then it is next-to-worthless. The true story could be better or worse than this data.

  4. econimonium says:

    constantnormal did you actually read the articles? Who’s listed in there? What is Amazon? Honestly does anyone read any more?

  5. GermanQR says:

    constantnormal:

    - E-commerce: 4% of total retail sales in the US. Irrelevant. And anyway, Amazon is mentioned in the artcile.
    - Same store sales: yeah, we all know a lot of stores are being opened lately…

  6. Francois says:

    econimonium,

    constantnormal asked about web sales. Amazon does Internet sales only. ;-)

  7. DrungoHazewood says:

    BBY baby!

  8. nickthap says:

    > No one who can afford otherwise goes out Thanksgiving night to stand in the cold with a crowd, to fight the stampeding, pepper-spraying mob for a discounted X Box.

    Barry, I hate to tell you this but if you lived out here in Middle America, you’d know that people do this out of boredom. Some may be desperate, sure, but not everyone. It really can be very boring out here, and people actually do do this kind of thing for fun. I know it’s hard to believe, and even harder to believe if you live in NYC or whatever. My sister in law went to Walmart at midnite in Leander Texas with her girlfriends. They didn’t need the deals, that’s literally their idea of fun (though she did say that she will never do it again).

  9. I have received so many e-mails with offers from Best Buy that I really couldn’t believe that Black Friday sales were any good. I was surprised by the amount of offers.

  10. GeorgeBurnsWasRight says:

    Retail and housing industries think they can’t admit what the real situation is because they depend upon buyers taking on more debt in order to buy their products. It’s classic hucksterism- everyone else is buying, so you must buy, buy, buy also. I wonder how many of their industry spokespeople worked for the tobacco industry back when they released all the “scientific studies” denying that smoking caused cancer.

  11. net_woot says:

    “Barry, I hate to tell you this but if you lived out here in Middle America, you’d know that people do this out of boredom. Some may be desperate, sure, but not everyone. It really can be very boring out here, and people actually do do this kind of thing for fun.”

    @nickthap – boredom may play a small role for some, but I think the vast majority are out after ‘bargains’.

    I agree that anyone who can afford to skip standing in line at midnight to save on some electronics is most likely at home in bed sleeping.

  12. DrungoHazewood says:

    Not to nitpick George, but when you mention smoking don’t leave out heart disease. Its the main threat. Many more deaths from smoking related circulatory problems. Its like the lung association hijacked the anti smoking campaign.

  13. wally says:

    BR, you might want to spell check that headline.

  14. Arequipa01 says:

    Here’s a basic rule of thumb:

    When they wave a bouquet of flowers in your face, it shouldn’t smell like horseshyte.

  15. cfischer says:

    @nickthap- I was going to respond almost verbatim. This is turning into an “event” for a lot of people. I know a lot of mothers+daughters in affluent sections of Northern NJ that do this because it’s fun for them. Barry, I wouldn’t be so quick to point to this as all severe economic distress..

  16. rd says:

    Earlier shopping times on Thanksgiving night is just a race to the bottom.

    The retailers know that there are a finite number of dollars and they are trying to get a bigger percentage. That is called “growth” by investors while the unsuccesful retailers simply die and shrivel up.

    I think the actual retail companies are desparate despite what their association says. This is similar to the housing industry where the homebuilders were giving houses away if you bought a granite countertop while the national realtor organziation was announcing that there had never been a better time to buy a house.

  17. tsetsaf says:

    Barry, surprised you haven’t jumped on NAR regarding their improper reporting of sales: http://blogs.wsj.com/developments/2011/12/12/housing-bust-to-look-worse-with-sales-revised/

    ~~~

    BR: I have a longer piece in the works . . .

  18. Concerned Neighbour says:

    Well according to the market, these retail sales didn’t disappoint. We had a massive rally on the supposed 16% increase in Black Friday sales, and rather than give some/all of that back we rally more. Yet another example of worse than expected news that leads to a rally.

    With the amount of spin/propoganda out there, I feel like we’re a stone’s throw from Orwellian society. The trajectory certainly isn’t encouraging.

  19. constantnormal says:

    OK, ya got me. Guilty as charged, I did not click through and read the articles. Still haven’t, but I HAVE brought up each of the four linked items in this post, and searched them for the following terms: {Amazon, web, internet}. There was a dismal lack of serious mention of these terms in almost all of the articles, with only one offering a single nugget of hard data. The MarketWatch piece had these two lines:

    “Also benefiting from higher demand for electronics were companies such as Amazon.com Inc. [AMZN -3.58%] that fall into the so-called nonstore retail category. Sales for those retailers jumped 1.5%.”

    This was in the context of an article that talked about retail sales for the MONTH of November. Sales that are deferred into December, or took place earlier in the year, are not touched upon, so far as I could see from a quick skimming of the text. The assumption apparently being that the bulk of sales for the holiday season still a=occur over Thanksgiving weekend. And that IS only an assumption, so far as I can tell. Nobody breaks out their sales numbers weekly and makes them available to their competition, I suspect.

    I find it highly amusing that within days there are numbers being touted for the retail industry, implying that they are representative of the entire holiday sea on, if not the year. One of the things that the web/internet has done to retail has been to de-emphasize these shopping extravaganzas (my subjective opinion, no supporting data), allowing a lot more people to defer purchases until the last week prior to the holidays, and spreading out the bubble of purchasing that used to occur over Thanksgiving weekend.

    Why do we even bother with quarterly reporting, just have merchants keep a daily total on their web sites of how well they did that day, to date for the quarter, and YTD?

    A more serious concern that I have is with the amount of disposable income out there, and the number of wallets it resides in. I somehow doubt that Jamie Dimon or Lloyd Blankfein are going to be playing Santa to millions/hundreds-of-thousands/thousands/hundreds of people. Nor should they be. And how about the impact on our consumer credit bubble, as we work to de-leverage ourselves? Does anyone expect consumers to spend more without being paid more? I could frankly care less about whether this is a dy-no-mite shopping season or not. The impact of cheap imported goods on the profit margins, of outsourced manufacturing, these are more relevant to our economy — and to the domestic stock market — than if Wal-Mart or Amazon had a blow-out Thanksgiving weekend.

    But really, so far as the stock market goes, does’t everybody know that the publicly visible markets mean little, that all the money that keeps the world turning is made in dark pools using default swaps? It appears that retail sales mean pretty much nothing these days, good or bad. That’s old 20th century finances. Things are different now.

  20. RuffRednSore says:

    Listening to the market segment on NPR this morning, I never would have known that sales came in so weak. Instead, they told me how it was the xth consecutive month of increasing sales indicating a more optimistic consumer. Then on the news segment at the top of the hour, they did say that sales came in weaker than expected. Why must everything be spun to show not the truth, but the rosiest most positive and often wrong point of view.

  21. Joe Friday says:

    GermanQR,

    constantnormal: – E-commerce: 4% of total retail sales in the US. Irrelevant.

    Beat me to it.

    They were hoping it would be 5%.

    A mere rounding error either way.

  22. Joe Friday says:

    tsetsaf,

    Barry, surprised you haven’t jumped on NAR regarding their improper reporting of sales: http://blogs.wsj.com/developments/2011/12/12/housing-bust-to-look-worse-with-sales-revised/

    ~~~

    BR: I have a longer piece in the works . . .

    That’s a full-time job.

  23. RuffRednSore says:

    Listening to Market Place on NPR this morning, I never would have known that November retail sales came in weaker than expected. Rather, they told me how it was the xth consecutive month of increasing sales, indicating a more optimistic consumer, and generally how this was a good report affirming the Black Friday sales numbers. And then they went on to say how consumers are using their savings for purchases, rather than using debt, and therefore this is another good sign! (the credit card was probably maxed out or they had no discretionary spending money left, and that’s why they’re dipping into savings?).

    Why must every economic report be spun to show not the truth, but the rosiest, most positive and often wrong point of view? I really thought that style of reporting went away after 2008.

  24. James Cameron says:

    Today, we learn that many breathless forecasts from NRF to ShopperTrak were so much hot air and empty hype:

    Haha . . . BR is never one to mince words. :)

  25. rj chicago says:

    We are left to ponder what those folks who were lining up late at night at Wal-Mart and Best Buy for bargains were doing. No, it was not a sign of “shopping enthusiasm,” it was a sign of extreme economic distress. No one who can afford otherwise goes out Thanksgiving night to stand in the cold with a crowd, to fight the stampeding, pepper-spraying mob for a discounted X Box.

    Here is your simple formula:

    Thanksgiving Thursday night shopping + record food stamps = Bad Economy

    Won’t someone please call the NRF and tell them to STF up?

    COULD NOT SAY IT BETTER MYSELF!!!!

    The only thing is this may be a window into more desperate times ahead as this economic malaise continues to be perpetrated on the “fine” citizens of this nation!!!

  26. Jack says:

    I have to agree with cfischer. Here in 07760-land it’s become an “event”. The same peoplw forking over $150++ for tweener rock concert tickets are doorcrashing Target, Best Buy, et. al. at the appointed hour(s). I almost said midnight but that’s not true any more.

    It’s just possible retailers discounted too deeply and caused themselves unnecessary pain.

  27. bergsten says:

    Anyone not born yesterday knows that the initially-reported “numbers” are always lies, designed to push the ignorant around. The original numbers weren’t “news,” and neither are the “revisions.” There’s nothing new about this, and these “reports” deserve to either be banned, or ignored. It’s yet another slam on the integrity of the media that they publish this tripe on behalf of their advertisers. Pointless dual sensationalism about nothing.

    I’m more interested in some more subtle, newer ways of pushing the ignorant around. One of these is that mysteriously, the long-working spam filters are suddenly letting emailed ads through that were heretofore quarantined. How did that happen?

    And, the fact that business is (seemingly) paying more and more to advertise (seemingly) more and more to (seemingly) nobody. When will businesses wise up and stop supporting this never-ending increase of middleman-enriching proliferation of pointless expenditure?

  28. rktbrkr says:

    These estimated sales reports are sales tools to try to create/maintain a buying frenzy, serve the same purpose as a line waiting to get into a disco. The disco can be empty but they’ll always have a line in front!

    Like going to a car dealer and asking about a particular model “oh, they’re in great demand…I’ll see if I can locate one in our data base” when they have dozens in the back lot.

  29. NewBob88 says:

    There is no recession here in Boca Raton, Florida. The 1%’ers are spending wildly. Shopping centers are full, restaurants busy and streets crowded with new vehicles. The unemployed seem to be the bottom of the barrel types that need training or mental health aid, or both. If you are unemployed, smart, hard working and want to make money come to South Florida (or if you can stand the cold … go to North Dakota). Both places have jobs for you.

  30. moneyanxiety says:

    Barry, you did a great job pointing out all those “forecasters” who missed the mark. What about the Money Anxiety Index that was right on the money with a forecast of 6.07% y/o/y increase in November (actual was 6.6%). Here is the actual forecast posted on our blog on November 5: The latest analysis from the Money Anxiety Index shows retail and food service sales increasing $22.7 billion or 6.07 percent this November, and $21.9 billion or 5.81 percent increase this December compared to the same two months last year. The increase in retail and food service sales is expected based on declining level of financial anxiety resulting from improvement in GDP and increasing consumer expenditure in the third quarter of this year.