This morning, Steve Liesman on CNBC showed all of the National Retail Federation numbers for spending plans this holiday season. Increases of 22%, big numbers.
Unfortunately, Steve omitted to show how the actual data of the past years have lined up with the NRF forecasts. As was discussed this past Sunday in the Washington Post, the answer is not particularly well.
Indeed, when we look at how far off these surveys have been in the past, it makes one wonder why anyone should pay any attention to them at all.
In 2005, based on a survey on Black Friday and Saturday, the NRF forecast a 22% percent increase in holiday shopping based on surveys conducted over the Thanksgiving weekend. The actual results? Up just 1 percent.
The same foolishness resurfaced again in 2006, with an 18.9% sales increase forecast. Sales were actually up almost 5%.
In 2007, just as the recession was getting underway, the NRF forecast a 4% gain in sales. U.S. retailers "unexpectedly" dropped 0.4% in December 2007, the weakest holiday season since 2002.
Given the broad scale of the economic collapse in 2008, expectations were for a 2.2% sales gain; they actually fell 6%
They don’t just get it wrong to the upside; during severe weakness, they exaggerate losses to the downside. With memories of the economic collapse still fresh, NRF's 2009 Holiday Consumer Intentions and Actions Survey for holiday shopping reflected an awe-inspiring drop of 43% versus 2008. 2009 holiday sales actually rose ~3%.
Last year, 2010 Black Friday weekend sales rise were estimated at 9.2%; They actually gained 5.5%.
Anyone quoting NRF surveys but failing to show the actual results are doing their viewers a disservice.
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
You are telling me that a journalist the caliber of Steve Liesman would go on TV and parrot whatever he is told by whoever tells him? This is Steve Liesman we are talking about.
Between inflation in some areas and sliced margins it is hard to imagine this being more than a ho hum profit season for retailers. The “factors” who by their debt will know soon after the first of the year.
We still have quite a few shopping days but yesterday in NYC stores that I went to were quite. You could have been “bowling alone” in the aisles at Lord & Taylor (on the up side, they have decent bathrooms). Even B&N at Union Square was pretty quiet. Maybe it was the rain.
And the “mortgage defaulters driving the shopping” meme makes its appearance
Amazingly fact free . . .
Not that I’m in the loop at all, but is anyone else hearing that retail has simply died after Black Friday and Cyber whatever?
[...] But Barry says never mind that nonsense, people are really bad at forecasting their own actions. (TBP) [...]
Listening to the NRF tell you how your peers are spending for the holidays is a like listening to DeBeers when they told you to spend 2 months salary on your engagement ring.
BusSchDean Says: December 7th, 2011 at 7:27 am
Between inflation in some areas and sliced margins it is hard to imagine this being more than a ho hum profit season for retailers.
reply: ———– Let’s go back to a time and place where in Econ 101, the concept of perfect competition was revealed and described. Some of the elements of perfect competition include homogeneous sellers, perfect information, no barriers to entry for sellers, and, consequently, low profit margins. Given the nature of retail, it would take a superior concept to achieve greater than average profits for one season, as competitors would flock to that concept for the next season. Thus, ho hum profits for any given season should always be the expected average.
To the point about analysts being incorrect … That any analyst would lie, or even miss the target so egregiously is shocking! I think I may have to consider canceling my subscription to the internet.
Today is December 7.
I only learned last week that in the 1930s Patton was stationed at Pearl Harbor and wrote an air raid defense plan.
According to this US Army website…”In his 1937 report dated June 3, he concluded Japan was willing and possibly able to attack Hawaii. His report detailed the following:
1. This study is based on the inescapable assumption that complete surprise offers the greatest opportunity for the successful capture of these islands.
2. Some of the Mandate Islands [noted above as the Carolines, Gilberts and Marianas], about which absolutely nothing is known, are only 2,500 miles distant, seven days’ steaming over the loneliest sea lanes in the world. Who can say that an expeditionary force is not in these islands now’
3. Since becoming modernized, Japan has never declared war.”
http://www.army.mil/article/49030/Patton_warned_of_Pearl_Harbor_attack/
Some people are good at predicting. The problem is getting others to listen, pay attention, and take action. There’s an op-ed piece in this morning’s WSJ which quotes Gingrich warning of an EMP attack and a Wired magazine reporter poo-poohing the notion. Who ya gonna believe? Some Wired magazine reporter or dis historian politician guy?
You could have left the heading as: Humans Are Awful. We’ve been mislabelled as homo-”sapiens” but we’re by no means wise. Clever, yes, but in no way wise. We’re uncooperative, selfish, greedy, ignorant, destructive and polluting the entire biosphere that we need to survive. We won’t last much longer on the timescale of the planet. We’ve become a cancer BECAUSE we stopped being stewards of our home – rapaciously guzzling any and all resources to live “high on the hog” now, as opposed to being cognizant of our side-effects and over population and not looking out for the future of our species (instead of concentrating on the “glorious” living for a relative few).
News flash: Bullshit is popular among dung beetles "” they just can't help it.
starting the story .. I had the preconception its wishful thinking .. and why not hype for churn .. our system is all about build it, if it doesn’t sell – it will at some $, there is always the writeoff bankruptcy .. private profits / public losses
that -43% number tho – didn’t fit above .. maybe reverse psychology .. scare all them its over .. so if they predicted +3% / would it have been -3%
I think we need to recast the famous Ronald Reagan quote here, “DON’T Trust; Verify.”
Incidents of bullshit are on the rise - http://www.youtube.com/watch?v=U9MGOckIzlU
[...] surveys such as this can be less accurate than we often assume, as Barry Ritholtz points out this [...]
A Milwaukee-based retailer (Kohl’s) has a track record which is very impressive w/regard “same-store” sales over the last several years.
Their numbers THIS year’s November were off ~4%. The only other time in recent history that Kohl’s had less same-store from one year to the next? Just after the Great Recession started.
One month does not a warning make, but watching Kohl’s may be useful.
dead hobo: We could debate relative retail strategies and innovations that have come over the years but the biggest difference among retailers — whether Trader Joe’s or Aldi’s, both started by the same family — is execution. Perfect competition presumes they can copy each other’s strategy, which they generally can with some organizational pain and expensebut. But they do not execute equally well. Here is where the biggest difference lies and, hence, the road to above average profits for that industry. Clearly comparing margins in retail with those in software make little sense.
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