It’s Beginning to Look a
Lot Like…a Very Good Christmas
The media’s pessimistic holiday shopping
forecasts fail to register with reality.
By Noel Sheppard
Free Market Project
Dec. 01, 2005
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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.
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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.
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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.
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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.
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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.”
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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.”
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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.”
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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.”
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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.”
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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.
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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?
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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:
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“‘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.”
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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.”
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It’s got to be tough to be a media Scrooge surrounded by all this
merriment.
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Noel Sheppard is an economist, business owner, and contributing
writer to the Free Market Project. He is also contributing editor
for the Media Research Center’s
NewsBusters.org. Noel welcomes
feedback at [email protected].
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