Objects May Be Smaller Than They Appear

At Bloomberg Barry Ritholtz scoffs at the NRF’s figures for Thanksgiving weekend that I expressed skepticism about yesterday:

I would bet my house that we didn’t have a 16% year-over-year sales gain this past weekend. I don’t do forecasts, but with inflation running at less than 2%, economic growth running at just a hair above 2% and employment slowing, I wouldn’t be surprised if we have real sales gains of between 1% and 2%. Then again, I don’t run a trade organization designed to promote and hype the retailing industry, a sector that has been under immense pressure during the past decade. It’s not called the retail apocalypse for nothing.

It is not just NRF sales reports that are suspect, but its holiday shopping forecasts as well: An earlier NRF survey of shoppers suggested retail sales for the period would rise “between 3.8 percent and 4.2 percent over 2018 for a total of between $727.9 billion and $730.7 billion.”

But this too is simply a guess. Asking people how much they spent last year (who can remember?) and how much they intend to spend this year (who really knows in advance?) gives you very little insight into their actual spending. Indeed, based on the track record of this methodology, the odds greatly favor this forecast being wrong.

The reason I was skeptical is that RetailNext and Sensormatic are measuring real, tangible things. That’s a lot different than the sentiment surveys the NRF is using.

2 comments… add one
  • CuriousOnlooker Link

    An interesting look at the furniture industry, outsourcing and tariffs.

    https://www.wsj.com/articles/the-u-s-furniture-industry-is-backbut-there-arent-enough-workers-11575504528

  • It highlights a point I’ve made here many, many times. You can train new workers. You can import new workers. You can’t train experienced workers, at least not in the near term, and you can’t even import them with any confidence. As one of my colleagues wryly commented to me, “Five years of experience in India equals one year of experience in the U. S.”

    It’s a basic supply chain problem. Once you’ve moved your supply chain abroad it’s much more difficult to move it back. You would think that companies would have alternative suppliers within the U. S. but apparently that is just too darned expensive under contemporary conditions.

Leave a Comment