Early Black Friday Sales Numbers Are Bunk

The ubiquitous estimates are designed to give the illusion of a holiday-shopping frenzy.

Andrew Kelly / Reuters

Every year, shortly after Black Friday, the National Retail Federation issues its estimate of all the retail spending over the first weekend of the holiday season. And every year, media outlets repeat that estimate in earnest: Last year, citing NRF data, The New York Times ran the headline “Black Friday Fatigue? Thanksgiving Weekend Sales Slide 11 Percent.” The Wall Street Journal went with “‘Black Friday’ Fades as Weekend Retail Sales Sink.” Such headlines are often taken as indicators of holiday sales in general, and even consumers’ confidence in the economy.

But there’s another, much less visible, component of this annual tradition: Every year, a man named Barry Ritholtz, an asset manager and contributor to The Washington Post and Bloomberg View, complains about the quality of the NRF’s data and the media’s mindless repetition of it. In last year’s installment of his ongoing rant, he wrote, “I have become a curmudgeon on this.”

Ritholtz is mad about two things. First, he takes issue with the NRF’s methodology. As he explained to the podcast On the Media last year:

What the survey that the National Retail Federation does every year is they ask a group of shoppers, “Hey, what did you spend on holiday shopping last year?” and they get some number, and then say, “Well, what are you going to spend on this year?” And they get a second number and then the difference between those two numbers is how they come up with [it].

In other words, the NRF data that major newspapers rely on is self-reported, and self-reported data on spending is notoriously weak. It’s just not very useful to know what shoppers say they expect their future spending to be. They are going to be wrong. (ShopperTrak, an analytics firm whose data was used by the Times this year to pronounce a “slip” in sales, uses a methodology that Ritholtz finds similarly suspicious.)

The second thing that irritates Ritholtz is how this (already questionable) data is used to make claims about consumer sentiment at large. In 2005, the year Ritholtz first aired his grievances (to a reporter at The Wall Street Journal), the NRF estimated that sales the weekend after Thanksgiving were up 22 percent, but holiday spending that season ended up increasing only 1 percent over the previous year. The most egregious instance was in 2009, when the NRF’s 43 percent estimated decrease was rendered ridiculous by the 3 percent increase revealed after an actual tally.

The NRF, for its part, has claimed that it doesn’t present its estimates as definitive, and further, says that it has confidence in the validity of its survey methodology.

Last year on On the Media, one host, Bob Garfield, posed an important question to Ritholtz. “Why is it in the NRF's interest to be trading these silly numbers year after year, especially when the numbers point downwards?” he asked. To which Ritholtz replied: “It keeps the shopping season front and center.”