Are retailers fudging the numbers?
As American news consumers, we all wait for Cyber Monday to tell us how amazingly successful Black Friday was in hopes that it is a sign that the economy is about to improve and we’re all going to swim in piles of money again, but perhaps the data released is less than reliable and we should hold off on our enthusiasm about retail sales?
We’ve all heard about the fist fights in Wal-Mart over two dollar waffle makers and the lady that sprayed another with pepper spray so she could grab the sale item out of her hand, which is dramatic fodder for traditional news outlets as they show how amazing the frenzy is and how impressive sales should be as a result.
Economist Barry Ritholtz at The Big Picture blog writes, “If its the Monday after Black Friday, then its national hype the fabricated data day!” His snarky retort to the numbers coming out today are a bit tongue in cheek, but should be noted as a countermeasure to the enthusiasm of local news anchors about generic Black Friday sales numbers (that Ritholtz analyzes as flawed).
Two studies, two very different results
The National Retail Federation (NRF) is reporting that retail sales rose 16 percent this weekend and that a record number of shoppers were in stores and spent more. The NRF says the average shopper spent $398.62 this weekend, up from $365.34 last year with sales totalling $52.4 billion. Ritholtz cries foul, noting that sales did not climb, rather the survey asked people prior to Black Friday to forecast their spending and their guesses about what they would spend rose this year, a number that Ritholtz calls “worthless.”
“We actually have no idea just yet as to whether, and exactly how much, sales climbed,” Ritholtz said. “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.”
Additionally, the NRF cites that one in four Black Friday shoppers were at stores by midnight and ShopperTrak claims a 6.6 percent gain in sales with a 5.1 percent rise in foot traffic which the company claims to measure with “equipment installed in stores to measure traffic,” but fails to measure how much was spent, what percent of shoppers were windos shoppers, what their budgets were or what they were willing to spend, factors which Ritholtz points out are more accurate, making this study a “very poor system for forecasting actual sales.”
Holding off on getting our hopes up
The NRF says sales rose 16 percent, ShopperTrak says 6.6 and with the two claims from within the industry show the problem with early reporting before the actual sales numbers are in. Ritholtz said, “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.”
Perhaps the hope consumers are seeking to find in the Black Friday general stats rather than stats from individual retailers should be measured later this week when all of the numbers are in rather than spinning misinformation today?
