During election season, that Claim Check logo up above usually indicated another politician flooding the airwaves with another questionable ad. But with the votes tallied, we return to using Claim Check to analyze – and occasionally debunk – claims found in the media, in scientific studies and in the wilds of the Web.
Today, we’re piggy-backing on excellent work done by Barry Ritholtz, CEO of Fusion IQ, who writes the popular financial blog, “The Big Picture.” For years, Ritholtz has pleaded with the media to report skeptically on Black Friday sales projections made by the National Retail Federation. He’s made inroads, but plenty of work remains.
The Boston Herald headline above is representative of stories that appeared in hundreds of media outlets. But don’t believe it.
The rosy numbers are based not on a rigorous analysis of sales, but on surveys of shoppers on the Friday and Saturday after Thanksgiving, asking them what they spent last year during the Black Friday weekend, and what they expected to spend this year. But as Ritholtz points out, “we know from both academic studies and experience that people are very bad at forecasting their own behavior.”
The surveys are conducted at the behest of the National Retail Federation, which has more than a passing interest in promoting holiday shopping. They also, conveniently, have a track record – which year after year has shown that the consumer surveys have not been good indicators of actual Black Friday spending. Last year, the retail federation announced a whopping 16.4 percent increase, but when the Commerce Department reported actual figures for November, retail sales were up about 6.7 percent.
The gap this year may be even greater. While the retail federation proclaimed a 12.8 percent increase, early reports from stores suggest far smaller growth. Thomson Reuters this morning reported on November sales at 17 retailers and found that sales at stores open in both 2011 and 2012 rose just 1.6 percent. Department stores saw a decline in sales, while discount and apparel stores saw a modest increase. (Note: Superstorm Sandy cut into sales for some retailers in the early part of November, so the month-long figures are somewhat depressed.)
The November picture will become clearer once more stores report their sales. But indications are that Ritholtz’ parting shot at the media will be on-target: “It is my assumption that the NRF propaganda is an attempt to create an environment of social pressure: EVERYONE is shopping, so you better get out there and shop too!” he writes. “One hopes the media would do a better job of checking that. Only they don’t. The media’s job should be to inform — not MISINFORM — their readership. On Black Friday reporting, they are failing miserably.”
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