Ho, Ho... No: AP Christmas Sales Reporting Was Way Off; Late-December +8 Pct. Shrinks to +3 Pct.

January 21st, 2016 12:19 PM

On December 28, the headline at a conveniently unbylined report at the Associated Press screamed: "HOLIDAY SPENDING UP 8 PERCENT; ONLINE SALES SURGE." As I noted in a post later that day, this was odd, to say the least, given that even the incurably optimistic National Retail Federation had predicted an increase of only 3.7 percent. It turned out that the reported growth rate was based on the number of sales transactions, not their dollar amount. Despite that, that late-December AP report repeatedly and irresponsibly characterized the percentage increase as showing growth in "sales" and "spending."

The NRF came out with its official Christmas shopping season sales increase on Friday: +3.0 percent. While she at least had the integrity to describe the news as "disappointing," the AP's Anne D'Innocenzio simply relayed the organization's excuses for the almost 20 percent underachievement (0.7 percent divided by 3.7 percent) without challenge, and never acknowledged that someone at the wire service which employs her had previously reported a figure that was over 2-1/2 times higher (8 percent divided by 3 percent).

D'Innocenzio's dispatch also gave readers the false impression that post-Christmas store closure announcements were more related to redeployment of retail resources online than a reaction to a weak Christmas season (bolds are mine):


Holiday shoppers flocked online during the critical holiday shopping season, but overall sales in November and December were disappointing.

Sales rose 3 percent to about $626.14 billion, according to The National Retail Federation. That's below the forecast for a 3.7 percent gain the group had expected.

The group blamed the shortfall on unusually warm weather that led to bigger-than-planned discounts on clothing and other cold-weather items. It also pointed out that stores don't have the ability to raise prices in a still tough spending environment, leading to worse-than-expected deflation in electronics like TVs and other categories.

A bright spot was online, though it represents just about 15 percent of total holiday sales.

...  the shift online is forcing stores to rethink the size of their stores and how big their entire fleet should be. In response to heavy competition from online leader Amazon.com, major stores have been investing in bigger distribution centers to speed up online deliveries and push free shipping. They've also been expand services like allowing online shoppers to pick up their orders at the store.

Against this background, several major stores have announced they are closing stores. Wal-Mart Stores Inc., the world's largest retailer, said it is closing 269 stores globally, including 159 in the U.S. as it looks to retool its business. The closures are a fraction of its more than 11,000 stores globally.

D'Innocenzio hauled out the warm-weather copout a week before Christmas. People supposedly weren't buying winter gear because the weather wasn't wintry. Given that we all know that winter weather eventually gets wintry at some point, it seems far more likely that consumers decided to rely on their existing winter gear to get through instead of spending money they don't have — because, as D'Innocenzio noted, we're in a "tough spending environment." That's a euphemism for "people don't have money to spend" — which, taken further, means that the Obama economy is hurting far more people than it's helping.

The AP reporter's Walmart-related argument appears plausible, except for one thing: The company's store-closure announcement doesn't mention online asset redeployment at all. Instead, it reported that "an active review of the (store) portfolio was underway to ensure assets were aligned with strategy." The word "Internet" is nowhere to be found; the word "online" only appears twice, in generic references to the company's sales platforms.

To no one's suprise, the wire service has memory-holed the original story, and it was never posted at the wire service's "Big Story" site. Too bad for AP that its first half is and will remain present at NewsBusters.

Cross-posted at BizzyBlog.com.