Over the years, I have been rather annoyed (perhaps too much) at the annual foolishness over Black Friday forecasts. Each year, we hear breathless predictions of ridiculous increases in consumer spending — holiday shopping rises 16% this season! — which turn out to be wildly over-optimistic, and are never confirmed by the actual data.
I’ve blogged about this annually for the past decade. Carl Bialik, the WSJ’s numbers guy, did a great piece on this a few years ago (Holiday Sales Numbers Don’t Add Up) but other than that, there is not alot of MSM recognition of the issue. I finally wrote it up for the Washington Post last year: Did Black Friday save the season? Beware the retail hype.
This year, the idea seems to have spread into the mainstream: Lots of coverage about it, with a few choice quotes from you know who tossed in for good measure.
Here is the The Globe and Mail:
“Barry Ritholtz, chief executive officer of Fusion IQ, a New York investment tool firm, is a long-time skeptic of early survey results. Not only are they released too early to compare to actual sales numbers, he says, but their measurement techniques are simply too indirect.
Foot-traffic assessments don’t properly separate browsers from buyers, Mr. Ritholz said. And he’s even more critical of surveys asking shoppers how much they plan to spend – which is how the NRF produces parts of its results. “Humans are terrible at forecasting their own behaviours,” he said.”
“Barry Ritholtz, director of equity research at Fusion IQ, takes to his popular blog every year to bemoan the “wildly optimistic” surveys that the media quotes at the end of Black Friday weekend.
Without fail, he says, the reports exaggerate consumer enthusiasm. He pointed to last year’s National Retail Foundation’s claim that sales had spiked by 16 percent – which, if true, would have been a record-breaking sum. There was no apparent attempt to check the data later on, but economists generally agree that consumer spending increased by less than 6 percent over the entire 2011 holiday season . . .
“You should be reluctant to draw too big a conclusion from one day,” Ritholtz said. “As we’ve seen, it never lives up to the hype. In fact, part of the reason there’s so much hype and false signals is there are so many people trying to get a read into that one day, far more than what you should typically be willing to see in one day. This is an economy, not an event.”
“As financial pundit Barry Ritholtz wrote last year: No, retail sales did not climb 16 percent. 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.”
So the good news is that print media has figured this out. Now, let’s see if television and radio can get their story straight . . .
Did Black Friday save the season? Beware the retail hype. (Washington Post, December 4, 2011)
Retail Sales Disappoint on False Black Friday Reports (December 13th, 2011)
No, Black Friday Sales Were Not Up 16% (not even 6%) (November 28th, 2011)
Entering the Holiday Shopping Season (Beware Surveys!) (October 28th, 2009)
Spinning Black Friday Retail Sales (December 1st, 2008)
Repeat After Me: Spending Surveys Are Meaningless (October 2007)
More Bad Data from the NRF? (November 2006)
Holiday Sales Numbers Don’t Add Up (December 1st, 2005)
Don’t look to Black Friday for clues to the market
The Globe and Mail Thursday, Nov. 22 2012
Despite Hype, Black Friday Can’t Predict Holiday Shopping Patterns
NBC, Nov 21, 2012
Lies, damned lies and Black Friday sales
Constantine von Hoffman
MoneyWatch, November 21, 2012