By nature retail sales (Christmas or otherwise) should increase every year, by inflation alone, if we are not in a deflationary environment. If you believe the government statistics, retail sales should rise 2-4%ish due to inflation alone even if actual goods purchases are flat- and if you believe the 'black helicopter set', the number should be higher than 2-4%. Second, we gave every working American family between $1000 and $2000 more a year due to the payroll tax holiday in 2011, so let's call it $100 to $175 a month. So by nature, in a country where saving is akin to 'letting the terrorists' win, spending should go up.
Aside from those two points - many stores were open at midnight (or in some cases 10 PM) rather than the 4 AMish of previous years, so you've added even more hours of the great American shopping experience this year versus last. Any scientist will tell you, we are changing multiple variables - so any year over year comparison when trying to analyze one variable (spending) is highly suspect.
Thus far we are hearing everything from a 6.6% increase in holiday sales, to 16%. Uhhh....
Why the huge difference? Barry Ritholtz over at the The Big Picture however says the early reports of giddy holiday sales - not accounting for my comments above - are mostly hyperbole at this point. Why? Much like the NAR in the real estate market, it's always sunny side up when an industry group reports data on its sector -- and the way these things are measured can be quite humorous. From Ritholtz:
When the data finally comes in, we learn that the early reports were pure hokum, put out by trade groups to create shopping hype. Let’s start with this whopper from an utterly breathless press release from the National Retail Federation:
“U.S. retail sales during Thanksgiving weekend climbed 16 percent to a record as shoppers flocked to stores earlier and spent more, according to the National Retail Federation.
Sales totaled $52.4 billion, and the average shopper spent $398.62 during the holiday weekend, up from $365.34 a year earlier, the Washington-based trade group said in a statement today, citing a survey conducted by BIGresearch. More than a third of that — an average of $150.53 — was spent online.”
No, retail sales did not climb 16%. Surveys where people forecast their own future spending are, as we have seen repeatedly in the past, pretty much worthless.
We actually have no idea just yet as to whether, and exactly how much, sales climbed. The data simply is not in yet. The most you can accurately say is according to some foot traffic measurements, more people appeared to be in stores on Black Friday 2011 than in 2010.
Mark's note - Do you remember to the dollar how much you spent this weekend? Within $10? Within $20? Do you even remember what you spent on lunch two days ago? But no worries, in a country where math is 'a challenge' for many, I am sure such surveys are incredibly accurate.
Barry also takes the 6.6% figure from another report (seemingly more reasonable accounting for inflation, and the payroll tax holiday) to task, later in his post. However, all of this is highly inconvenient so I'd much rather take the breathless data at face value and just cheer!