Posts filed under “Consumer Spending”
One would hope that after a decade of people lamenting the poor reporting of Thanksgiving weekend retail data, the news media might learn to do better. Yet we see few if any signs that reporters understand the misleading press releases put out by the retail industry and its flacks.
The innumeracy of the media has not been greatly exaggerated
The Wall Street Journal, the New York Times and others reported industry estimates of sales as if they were grounded in fact. As we discussed last week (“Ignore the Black Friday Hype“), these shopper surveys and measures of foot traffic have in the past had no predictive value relative to retail sales. Their track records are fairly awful. The National Retail Federation has been especially terrible in its forecasts. A coin flip– 50/50 chance of getting it right — has much greater accuracy than these surveys.
Let’s look at each of these reports to see if we can identify where they went awry.
“Retail spending over Thanksgiving weekend dropped for the first time in at least seven years, the industry’s main trade group said …”
It may have said so, but we do not have any reliable data yet as to how much was spent over the holiday weekend. What the WSJ was reporting were answers to a survey question as to what shoppers recalled spending last year over Thanksgiving weekend — $423.55 — versus what they thought they would spend this holiday weekend — $407.02.
Neither shopper number is based on any review of actual spending; these are figures that random shoppers literally make up on the spot. They are made without the benefits of looking at checking accounts balances or credit card statements. History informs us that neither guess is remotely accurate.
One would imagine that the best-read business publication in America would be able to handle analyses of this sort easily. Over the years, I have witnessed other sorts of innumeracy from the Journal when it pays attention to industry flacks. The one that stands out most was confusing the annual seasonality of home sales with a housing recovery (see this and this).
“Over the course of the weekend, consumers spent about $1.7 billion less on holiday shopping than they did the year before, according to the National Retail Federation, a retail trade organization.”
No, they did not spend $1.7 billion less. (We don’t know yet). The most you can say with any degree of accuracy is that shoppers said they were planning on spending about 3 percent less this year. However, shoppers’ declared intentions in years past have been anything but accurate. This has been true whether they expect to spend more or spend less. Humans are simply terrible at predicting their own behavior; you are not that good at recalling your own past behavior, either.
Unfortunately, the Times also pulled a lot of the NRF press release verbatim. The “paper of record” was acting more like the stenographer of record.
(Even data-driven Bloomberg News isn’t blameless, reporting ShopperTrak’s foot-traffic surveys as if they have some sort of predictive value.)
The media seem to get this wrong every year. Last year, there were glimmers of hope as we saw lots of smart and skeptical reporting (“Black Friday Skepticism (Finally!) Goes Mainstream“). I wonder if green and inexperienced reporters are simply thrown onto this beat with no guidance, no institutional memory to aid them.
It seems the media has relapsed. This year the skepticism evaporated, and mostly negative reporting has occurred with no factual basis for it. Investors are advised that media reports of holiday shopping are unreliable and inaccurate.
Originally published at Bloomberg View
I am writing up my BBRG coverage of the innumerate business reporting of Black Friday and the holiday shopping weekend. The press as per usual got it wrong again this year. Here is the press release from the NRF, pushing their usual survey silliness as if it were actual retail sales data: “More than 141…Read More
> My Sunday Washington Post Business Section column is out. This morning, we look at the retail theater that is Black Friday: Beware of bad Shopmas data! Here’s an excerpt from the column: “The news media aren’t any better. They breathlessly cover shopping as if it were an Olympic event. The big-box retailers play right…Read More
Thanksgiving is but a few days away. We celebrate by the giving of thanks for whatever bounty has come your way. It is a warm and wonderful holiday full of family and tryptophan and good cheer. Black Friday, the day after turkey day, is the official kick off of the season I like to call…Read More
Jay-Z faces pressure to end his partnership with Barneys over racial profiling, but Larry Wilmore sees selling out as a sign of progress. Shopping While Black The Daily Show Get More: Daily Show Full Episodes,The Daily Show on Facebook TDS, November 6, 2013 (06:45)
Excerpt “According to Nielsen, from data provided by managers at Nielsen SoundScan, which collects recorded-music sales information, of the eight million unique digital tracks sold in 2011 (the large majority for $0.99 or $1.29 through the iTunes Store), 94 percent – 7.5 million tracks – sold fewer than one hundred units, and an astonishing 32…Read More
Fruits of Passion Click for interactive chart Valuables Source: Economist I love that classic car investing has trounced Art, Coins, Wine and Equities !
Category: Consumer Spending
click for ginormous graphic Source: WSJ I love this giant graphic from this morning’s WSJ — it gives us the 30,000 foot view of consumer debt here in the USA. Despite low rates — or is it because of them? — American consumers have seen their debt loads fall to the lowest levels…Read More