For those trying to make sense of who the winners and losers are this U.S. holiday shopping season, and what it says about the state of the U.S. economy, there are a plethora of forecasts, estimates and surveys, as well as tons of anecdotal evidence.
Investors and Wall Street strategists who follow retail sales say that to avoid being confused by the deluge of data it is best to measure or forecast sales over a three-month period — from November to the end of January — rather than just a few days or a few weeks around Thanksgiving or heading into Christmas.
That way, timing impacts are reduced. This year, for example, the period between Thanksgiving and Christmas Day is only 26 days against 32 days last year, and the increasing popularity of gift cards is also taken into account, as those sales usually occur in January, after the holidays. (Gift card sales are only measured by retailers when spent, not when they are first purchased.)
They also say it is important that data be as comprehensive as possible, and that the stores that are being measured or projected exclude gasoline (sales vary so much depending on the price), automobiles, and in many cases food.
With that advice in mind, here is a quick guide to some of the most prominent forecasts and surveys:
NATIONAL RETAIL FEDERATION: The NRF’s holiday sales estimates cover November and December, a figure that includes just about every type of retailer save for gasoline, auto parts and restaurants. It does not include gift card sales, as the NRF says it only counts those when they are redeemed, which is usually in January. Its estimate was for 3.9% year-over-year growth. NRF also surveys consumers to estimate average per-person spending. This year, it expects a 2% decline to $737.95; the federation explains the divergence between its two figures as the result of one being a forecast and one a survey. “People may say and do two different things,” says Kathy Grannis, senior director of media relations at the NRF.
DELOITTE: The auditing and consulting firm forecast a 4%-4.5% increase in sales to a range of $963 billion to $967 billion, which covers the November to January period. Its forecast does not include motor vehicle and gasoline sales but does include food service. It also expects on-line sales to rise 12.5%-13% this holiday season. Unlike the NRF, it estimated an increase in average consumer spending on holiday gifts over last year, to $421 from $386.
THOMSON REUTERS SAME-STORE SALES: Same-store sales for the November-January period is expected to rise 1.7%, up from the 1.6% growth rate in 2012, but still shy of what the Thomson Reuters research team considers a healthy growth rate at 3%. According to analyst Jharonne Martis, Thomson Reuters tracks 75 different store chains, using analyst estimates to arrive at their overall estimate of these discounters, department stores and specialty drug stores, but not auto sales.
U.S. MONTHLY RETAIL SALES FIGURES: The Census Bureau releases monthly figures on retail sales in the middle of the month (November’s figures will be out on Dec. 12). The data estimates overall U.S. retail sales figures on a seasonally adjusted and not-seasonally adjusted basis, and can be sliced up in varying ways to eliminate information like gasoline sales which are more volatile. “My preferred gauge when we have real, hard information from the government is to look at November and December sales, excluding gasoline, excluding automobiles, and excluding restaurants,” said Chris Christopher, economist at IHS Global Insight.
For November, retail sales are expected to have risen 0.3%, according to the Thomson Reuters average of 13 economists. Excluding autos, sales are expected to have risen by 0.2%.
SHOPPERTRAK: This retail technology firm reports on weekly sales figures by measuring retail store traffic in 90 different countries around the world. Its U.S. retail sales estimate excludes motor vehicles and parts, building materials, food and beverage stores, health and personal care stores, miscellaneous store retailers and electronic and mail-order activity. In November, ShopperTrak updated its forecasts and predicted that 10% fewer shoppers would visit brick and mortar stores in November and December than did in 2012. Additionally, it expects traffic in electronics and appliance stores to decrease by 11.5% compared to 2012.
MASTERCARD SPENDINGPULSE: The credit card issuer’s professional services arm puts together this monthly report on national retail sales, which is based on “aggregate sales activity in the MasterCard payments network,” along with estimates for other forms of payment, including cash and checks.
For holiday shopping, it predicts that Dec. 21, the last Saturday before Christmas, will be the biggest shopping day for jewelry and other luxury retailers. Last year, sales on that day accounted for 8% of jewelry sales, more than double any other day during the season.
JOHNSON REDBOOK and ICSC-GOLDMAN SACHS: Both of these reports on retail sales figures are produced weekly. Redbook’s report is a sales-weighted index of year-over-year same-store sales growth, sampling large U.S. general merchandise retailers representing about 9,000 stores, while the International Council of Shopping Centers and Goldman Sachs jointly publish its retail chain stores index, which represents about 75 retail chains stores. ICSC has forecast holiday sales will climb 3%-4% this year.
THE STOCK MARKET: Judging retailer performance by activity in stocks over a few days isn’t the best gauge, but recent history does recognize the growing influence of internet retailers. Online sellers have outperformed other retailers and the overall S&P 500 index in December since 2000, according to Bespoke Investment Group of Harrison, New York. The online category has gained an average of 3.9% since 2000, compared with an average 1.7% gain for the S&P. By contrast, apparel retailers have lost 1.3% and electronics retailers have dropped 4.1% in December. In Friday’s abbreviated trading, Amazon.com gained 1.8% and Best Buy, one of the S&P’s best performers in 2013, rose 2.4%. By contrast, Kohl’s was down 1.1%.
— David Gaffen. Published with permission of Reuters.