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Holiday Shopping
HOLIDAY SHOPPING....The National Retail Federation passes along some holiday cheer today:
More than 172 million shoppers visited stores and websites over Black Friday weekend, up from 147 million shoppers last year.
Shoppers spent an average of $372.57 this weekend, up 7.2 percent over last year's $347.55. Total spending reached an estimated $41.0 billion.
We seem to have an arithmetic breakdown here. My calculator says this weekend's numbers come to $64 billion, compared to $51 billion last year. That's a 25% increase.
That seems implausible to me. On the other hand, it also seems implausible that 172 million times $372.57 equals $41 billion. So what's going on?
POSTSCRIPT: For what it's worth, the NRF's methodology is to survey a bunch of people in an online poll and ask them how much they've spent this weekend. Every news outlet in the country reports the NRF numbers as gospel, but frankly, this approach strikes me as so dubious that I wonder if their numbers would mean anything even if they could get their arithmetic straight. It sure doesn't jibe with the report of Wachovia analyst John Morris, who told the New York Times that "there was definitely more elbow room" in stores this year; or with ShopperTrak, which told them that sales increased only 3 percent on Friday; or with the numbers provided by Marshal Cohen of the NPD Group, who told them that Friday foot traffic was down 11 percent and the "shopping bag count" (whatever that is) was down 24 percent compared with last year. Very fishy, no? I blame the War on Christmas.
UPDATE: In comments, big truck notes that in the fine print NRF says that their 172 million number "includes same consumer shopping multiple days." So maybe there were 110 million actual human beings spending $372 each, which would net out to $41 billion. However, applying the same logic to last year's numbers still produces a 20% increase in total dollars spent this year ($41 billion vs. $34 billion), which seems wildly implausible. Why on earth does anyone take these figures seriously?
I blame Bush
I have no answers on the math. I can say that this was the first year I ever shopped on Black Friday. I had even announced that I would spend the day at the beach, and it was a nice day, but at 6:40AM I was at Office Depot standing in the checkout line to get a 1TB external hard drive for $70 less than Amazon was selling it for. I'm not sure Office Depot made any money, but it sure got me out really early. And I hit the beach later in the day.
I go shopping, but may not buy anything. I take that 172 million as in foot traffic totals whether they buy something or not...and the $372.57 is from people who actually bought stuff.
Simple math says that $372.57 came from 110 million people that actually bought stuff, and that there were 61 million shoppers who didn't buy anything.
Anonymoose: Yeah, that could be it. However, I couldn't find anything in their writeup that suggested this, and it would sure be a weird use of "average." But I guess you never know.
Weird.
Looking at their full survey results, it seems that a single person can be more than one "shopper." If a respondent says he went to the stores Thursday, Friday, Saturday and Sunday, then he counts for four shoppers.
This is easier to see in the 2007 results. 44 percent of respondents that year said they had already shopped or planned to, so that got extrapolated to 99 million adult Americans.
But then they ask those respondents which days they shopped. Quite a few shopped on multiple days, and now 99 million has magically become 147 million.
Basically, the number of "shoppers" the NRF cites in their press release is meaningless -- a cheap tallying trick.
By dividing the 2008 estimates spending total by the average spending amount, we get 110 million actual shoppers, a 10% increase from last year. Though god knows what the margin of error on this thing is. The methodology's about on par with a Zogby tracking poll.
News orgs really cite these numbers? That's amazing. Nice catch.
But as you said, it's amazing anyone puts any stock in this data at all. It's worse than a Zogby tracking poll.
Bleh. Actually, it's easiest to see in the small text under the first question in the 2008 results:
Estimated # of Shoppers Thursday thru Sunday (includes same consumer shopping multiple days)
Wish I'd seen that half an hour ago. It's still dodgy as hell.
Not quite the same metric but my during my Thanksgiving car trip this year I encountered remarkably little traffic, despite the price of gas. It was as if I were travelling on a regular weekend or something.
Right. And a million people will stand/sit outdoors to watch the Rose Parade. Right.
"Why on earth does anyone take these figures seriously?"
Because merchants need to encourage buyers to come out and join the festivities and buy. Newspapers and other media outlets need something to point to encourage merchants to advertise. "It's not as bad as you think and your competitors are getting your business." In other words they're trying to create a reality.
Somehow, and I sure don't know the answer, but somehow, someday, we need to get to a point where our well-being isn't dependent on an annual feeding frenzy of greed and consumption.
I went to the mall bought myself a shirt that was on sale for $13.00. And a photography magazine. And a book that my wife wanted. Have I done my share?
It's hype as far as I'm concerned. If we sell half as many bicycles as we did last Christmas, I'll be surprised.
Both foot traffic and sales are down significantly.
Here's some very unscientific information. I spent a fair amount of time in Times Square over the weekend with relatives from out of town. The crowds seemed much lighter than I have normally experienced there. The weather was quite good for late November.
thersites,
Have I done my share?
No. I really really really want a PS3. If you buy me one then you will have done your share.
Joking aside, the local Best Buy was not swamped as usual on Friday, and today they *still* have a few of the teaser loss-leader laptops in stock, which I have never ever seen before in the past ten years or so.
Plus my normal holiday traveling around the upper midwest almost felt spooky. Huge truck stops sitting empty. It was an odd feeling.
OT - Kevin or moderator - is there any way at all you can make this comment box re-sizable? It feels like I'm typing on a postage stamp.
Here's one retail owners story that does not depend on on-line surveys - business is really bad. It's pretty simple, traffic is down, the average sale is down, sales are down. And there's no reason why this shouldn't be the case. People are out of work, scared they'll soon be out of work, out of money, and/or (temporarily I hope) out of hope for the near future. This NRF story is bogus and when the real numbers come out in January, everyone will know how bad it was in retail this month. Just like now we find out the recession started a year ago. I could have told you that then, too.