In the early days of this blog, I’d regularly compare the Wall Street Journal’s reporting of a news story with that of the Financial Times, because in the vast majority of cases, the Journal had either gotten it badly wrong or was putting a very positive spin on a less obviously cheery fact set.
That abated somewhat as the Journal got to be less clueless about the credit markets and the crisis got so bad that the Journal quit falling for sources putting lipstick on pigs.
But old habits die hard, and we see a reversion to form tonight.
The headline is a give-away: “Holiday Shopping Off to Strong Start.” And the supporting data?
The holiday shopping season got off to a better-than-expected start, as retailers reeled in cautious shoppers with massive discounts like “buy one get one free” sweaters at Gap Inc. stores, $200 iPod Touch music players from Amazon.com Inc., and 26-inch LCD TVs at Target Corp. sites for $299.
In a survey of 3,370 shoppers, the National Retail Federation estimated shoppers spent an average of $372.57 over the weekend, up 7.2% over last year’s $347.55.
Gee, that sounds really good, particular given the gloom and doom expectations. But what does the story say later?
A different survey, performed by ShopperTrak RCT Corp., found sales on Friday were up 3% over last year, to $10.6 billion. The gains marked a deceleration of growth compared with 2007, which posted 8% sales gains. ShopperTrak will release data for Saturday and Sunday on Monday.
Up 3% is still a good number, but the ShopperTrac survey appears to be based on real transaction data, not a survey. Surveys, particularly ones with random sampling (how is the Retail Federation survey done? Do they walk up to people in malls? You’d probably have lower participation by window shoppers or in-and-out buyers by mere virtue of the fact that they’d spend less time on premises). However, quick look at ShopperTrak’s website shows it promoting traffic count surveys, so I wonder how they came up with their figures. More disclosure about the methodologies would have been helpful.
But the Journal chose to lead with the more optimistic, and potentially less reliable survey (in fairness, in this case, so did the Financial Times, but with a tad less enthusiastic headline (“Black Friday bargains lift sales“). The New York Times gets a gold star for most nuanced headline: “Solid Start to Holiday Shopping, but Discounts Threaten Profits.”
But both stories stressed that sales were in heavily discounted items. From the Journal:
Although unprecedented discounts lured shoppers into stores, momentum ebbed Saturday, raising concerns that shoppers were merely exploiting the “door-buster” deals and then walking out of stores. Indeed, as many as 70% of consumers purchased only deeply-discounted merchandise Friday, according to Charleston, S.C.-based America’s Research Group, which polled 700 shoppers over the weekend.
“They didn’t stay if they didn’t get the deals,” says Britt Beemer, the firm’s founder.
In other word, profitless revenues on many of the items sold, and other inventory left behind.
Both the Journal and the FT stressed that crowds were thinner Saturday. And the FT gave another proviso:
Despite the attention paid to the weekend by stores, the post-Thanksgiving sales are not a reliable indicator of the industry’s performance for the whole season, because the highly competitive price cuts sometimes bring some spending forwards.
The New York Times was downbeat by comparison:
But while spending was up, there were troubling signs in the early numbers. The bargains that drove shoppers to stores were so stunning, analysts said that retailers — already suffering from double-digit sales declines the last two months — would probably see their profits erode even further.
Also, after shoppers flooded stores on Friday, foot traffic trailed off significantly on Saturday and Sunday.
I unexpectedly did my patriotic bit and the first time ever was at a mall on Black Friday (I am also just about never in a mall) buying a book light at full price. It turned out to be lousy, less bright than the lights on the airplane. And I deliberately bought the expensive one with the strongest light. No wonder I hate shopping.