The media’s pessimistic holiday shopping forecasts fail to register with reality.
Don't miss my latest at the Free Market Project: Contrary to the media’s pessimistic forecasts for the Christmas shopping season reported by the Free Market Project in late October, strong retail sales this Thanksgiving weekend got the annual end-of-the-year buying bonanza off to a bang. In fact, the economic data available prior to this weekend looked so strong that the National Retail Federation, the world’s largest retail trade association, actually raised its sales forecast for 2005 holiday shopping from a 5 percent year-over-year increase to 6 percent.
Regardless of this upgrade in expectations by retailers themselves, and the fabulous start to the shopping season, the media continued to rain on everybody’s parade.
The gloom started Saturday evening, November 26, on network newscasts with announcements of sales being “off a bit” compared to last year. It continued early Sunday morning with CBS’s Charles Osgood proclaiming, “Sales for the day after Thanksgiving were a bit flat.” Americans were also greeted Sunday morning with headlines like “‘Black Friday’ Sales Down Some From 2004.” As people went back to work on Monday, statements like “the results were on the lukewarm side,” as well as headlines such as “Malls See Troubles in Sales Data” filled their morning papers.
As usual, the facts belie the media accounts. The numbers that were rung up at the nation’s cash registers this Thanksgiving weekend, along with the final tallies of the online purchases made on “Cyber Monday,” indicated that once again, the American press had underestimated both consumers’ desires and their ability to spend money.
What are the facts? Well, the NRF press release on Sunday, November 27, stated that “the average shopper spent $302.81 this weekend, bringing total weekend spending to $27.8 billion, an incredible 21.9 percent increase over last year’s $22.8 billion.”
Yet, Saturday evening, NBC’s John Seigenthaler said on the “Nightly News”: “Early indications tonight are that sales were off a bit compared to last year's record-breaking Black Friday, when stores hope for a sign that the season will be a profitable one.” Correspondent Dawn Fratangelo responded, “They seem bigger, more maddening. But sales for so-called Black Friday are down about 1 percent from last year.”
On CBS’ “Sunday Morning,” Charles Osgood chose to follow the pessimistic herd, sharing this with his viewers: “Early reports from Friday, the kickoff to the holiday shopping season, indicate that despite heavy shopper traffic and deeper discounts than last year, sales for the day after Thanksgiving were a bit flat.” The Los Angeles Times was also Scrooge-like with its report on Sunday: “The official holiday shopping season appears to have gotten off to a lukewarm start, said a national research group that monitors retail sales.”
Why such a stark contrast between facts and reporting? Well, the media seemed fixated on sharing data collected by only one source, ShopperTrak, a leading provider of shopper traffic information. Its data indicated a 0.9 percent decrease in sales on “Black Friday.” Curiously, the media largely ignored the NRF’s estimates of a 22-percent gain, as well as that of Visa USA’s SpendTrack which, according to Dow Jones News, saw a 15-percent increase in sales on Friday and Saturday.
By focusing attention on only one of the three surveys – and what’s more, the most pessimistic one – the media presented a tremendously negative snapshot of the weekend’s sales numbers. As a result, the Associated Press reported on Monday: “The nation's retailers had a modest start to the holiday shopping season as consumers jammed stores for bargains in the early morning hours Friday but seemed to lose interest as the weekend wore on.”
By Monday evening, the broadcast networks once again joined in the gloom. Rather than stick to the numbers, the “CBS Evening News” focused on extraneous issues such as energy prices, savings rates, and consumer debt levels that, in their view, should constrain Americans from making merry this year. Trish Regan began her report, “They started with a bang, but then, retail sales slowed to a whimper.” As Regan spoke to one woman about her holiday purchase plans, Regan stated: “She has a lot of shopping to do. But like many, Eileen is watching her budget this year. Rising energy costs means there's less money for gifts.”
Regan then sought the opinion of retail analyst Howard Davidowitz: “We've got a consumer with zero savings and record debt. We have had a free lunch, Trish, and now we're going to buy dinner.” Regan finished her report: “Consumers are expected to spend about $681 a piece this holiday season. That should drive retail sales up about 5 percent – less than last year, but still an increase.”
Not to be outdone, the “NBC Nightly News” did its part on Monday evening to play down the strong start to the holiday shopping season. What was their primary concern? Believe it or not, that people were actually looking for bargains and trying to stay within their budgets.
Brian Williams began the segment by sharing the NRF data, but qualified that with, “But as NBC News chief financial correspondent Anne Thompson reports, even those numbers leave a lot of unanswered questions about this potentially shaky holiday shopping season.” Thompson then interviewed Brit Beemer of America’s Research Group: “Two-thirds of consumers stayed within their budget. So when you look at the overall numbers, you know, consumers were very cautious.” Thompson also discounted the strong sales figures this weekend by stating, “Despite all the hype in recent years, the first weekend has not been a very reliable indicator of the rest of the season.” If that’s the case, then why did every media outlet in America including NBC News focus so much attention on it?
Adding insult to injury for the Gloomy Guses that largely comprise the mainstream media were the fabulous numbers reported on “Cyber Monday” – the day after the long Thanksgiving weekend when many Americans supposedly spend their first day back to work Christmas shopping online. This year didn’t disappoint. According to CNNMoney.com: “comScore Networks reported that non-travel spending on Cyber Monday increased 26 percent to $485 million this year.” According to comScore, the best is yet to come:
“‘Black Monday was only the 12th highest online spending day of the 2004 holiday season. Last year, peak sales days actually occurred in mid-December as consumers scrambled to take advantage of late-season discounts and free-shipping offers,’ Gian Fulgoni, chairman and co-founder of comScore Networks, said in a report.”
How good could it get, in their view? “ComScore forecasts that total holiday online sales, excluding travel, will grow 24 percent over last year to $19 billion during the key November-December shopping months.”
It’s got to be tough to be a media Scrooge surrounded by all this merriment.