NRF Black Friday Distortions

Over the weekend I received some taunts about how "great" Black Friday was.

Bloomberg reported U.S. Shoppers Spend 19% More on Thanksgiving Weekend.

Nov. 26 (Bloomberg) -- U.S. shoppers spent 18.9 percent more over the Thanksgiving weekend than last year, kicking off holiday gift buying with purchases of discounted wide-screen televisions and clothes, the National Retail Federation said.

Consumers spent an average $360.15 each over the weekend, up from $302.81 a year earlier, the NRF said today in a statement. Fewer people shopped, with about 140 million visiting stores during the four days including Thanksgiving, down from 145 million last year.

That did not jive with sales at Walmart as CNN Money reported Wal-Mart sees sluggish sales for November, including Black Friday results.

Wal-Mart Stores Inc. predicted surprisingly weak November sales on Saturday, but a survey of thousands of retail locations pointed to a relatively healthy start to the holiday shopping season.

Wal-Mart estimated that November sales fell 0.1 percent at its U.S. stores open at least a year - the forecast includes sales on Black Friday. At the same time, a survey by ShopperTrak estimated a 6 percent sales increase overall for the day, to $8.9 billion.

Wal-Mart's results would mark the company's first monthly same-store sales decline since April 1996. The retailer had expected same-store sales to be flat compared with the same period last year.

So who to believe, Wal-Mart or the National Retail Federation (NRF) ?
The Big Picture Blog puts this story to bed with More Bad Data from the NRF.

I�m kinda dumfounded to see this issue come up time and again, but -- there they go again: The National Retail Federation is once again putting out bad dope:

"Retailers kicked off the holiday selling season in style as shoppers across the country set their alarms for the wee hours of the morning to catch doorbuster specials. According to the National Retail Federation�s 2006 Black Friday Weekend Survey, conducted by BIGresearch, more than 140 million shoppers hit the stores on Black Friday weekend, spending an average of $360.15, up 18.9 percent from last year�s $302.81.*"

Or so said the NRF's press release. Note that little asterisk?* Follow it, and we see

"*Spending data includes Thursday, Friday, Saturday and projected spending for Sunday."

Even that disclaimer is inaccurate: First, this is not based upon actual sales data, but rather, is a survey of consumers. Not only that, but much of the survey results are self-reported projections of spending expectations -- not receipts.

Note that this has become an annual rite of error by NFR. In my opinion, based on my read of how they present this data, I suspect they are purposefully attempting to mislead the media. We saw the exact same issue last year in the way they report their survey: In 2005, the NATIONAL RETAIL FEDERATION said holiday Retail sales rose 22%; We later found the actual sales data was nowhere near that statement. Taking a survey forecast and reporting it as actual sales is not honest.

Given last year's debacle, as well as the more recent cheerleading back-to-school forecast, one would have hoped the NRF would make it clearer that this isn't actual sales data -- but rather, is a survey asking people how much they intend to spend, and on what items.

What I fail to understand is how Bloomberg and other places can fall for this nonsense time and time again. This is the direct equivalent of the Charley Brown / Lucy football scene being played every Thanksgiving in real life. Now let's wait for some real data.
Thanks Barry.

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/