I have expected retail this season to be late and sales-driven. Early reports from Black Friday bear this out. The investment implication is not to draw too many inferences from early data, and not to apply historical trends to this ahistorical moment.
The media reported that sales were up slightly from last year; but Barry Ritzholz properly cautions that “Every year, various groups — NPD, Retail Federation, Shopper Track, and others — release this weak ass data that is almost never correct. And each year, the press laps it up like manna from heaven.” Karl Denninger goes on to show how far off some prior flash estimates have been.
The chart from the Natl Retail Federation shows that while foot traffic was up, sales per shopper was down. Overall sales are estimated as essentially flat – the tail on the green line. The report goes on to comment that “Shoppers … were willing to open their wallets for a bargain … .” Other reports agree.
What is most interesting is that CyberMonday – the hunt for bargains online after Black Friday – seems to have started early. In the past this might have come from a dearth of home broadband – in other words, fake working on Monday and get on the office broadband to shop. Now home broadband is fairly ubiquitous. Instead, it may be due to relatively low inventories in retail. Much of the CyberFriday traffic was late in the afternoon into the evening. Hunt for bargains during the morning, go check online in the afternoon. Still, the cyber traffic report also concluded that the web sites were able to handle the increase, which suggests it wasn’t that large.
We shall see if the real CyberMonday spikes higher, or not. I suspect not, as this season will be late as shoppers wait for bargains.