The nation’s retail sector is famously fickle, and explaining its ebbs and flows is no easy task. This is especially true during the short-lived and hectic holiday season, when sales numbers can be significantly affected by everything from bad weather and high fuel prices to inventory shortages and the days of the week on which Christmas and Hanukkah fall.
‘Tis also the season for simplistic media stories, so perhaps it’s unsurprising that the retail sector’s complicated variables proved too much to tackle for the nation’s business journalists. Far easier, it seems, to fall back on that old standby: checking out the latest fluctuations in the stock market and inferring that “investor sentiment” is somehow an indication of an entire industry’s fortunes.
So it was that Bloomberg reported Monday that “U.S. stocks extended the longest losing streak since October on concern that holiday sales may disappoint, dragging down retailers and technology shares.” The inference here is that this “concern” is shared by retailers — including RadioShack Corp., Best Buy Co., Federated Department Stores Inc. and Bloomingdale’s, all of which saw their stock slide this week — though no evidence was provided to suggest that sales at these stores were actually below expectations.
Similarly, the Washington Post‘s Jerry Knight told us late Monday that “Investors who had counted on Christmas cheer from the stock market are getting heartburn” from the retail sector’s performance. As evidence that retailers are having a bad year, the Post attempts to pass off the following: Some of the big chains are offering discounts and “Macy’s announced plans to keep its east coast stores open until midnight — always a sign that sales aren’t too good.”
A sign to whom? Our best guess after reading this story is that it’s a sign to journalists looking for signs. No doubt, this search was assisted by “investors” (read: day-traders) who, like so many tribal shamans, are always divining significance from seemingly insignificant activities and events. Either way, one would hope that business journalists would check a few facts before spouting nasty prognostications based on Wall Street’s latest rain dance.
As it turns out, several reports this morning seemed to suggest that retailers are posting holiday sales that are more than acceptable. Reuters, for example, reported that “U.S. chain store sales rose solidly in the latest week as consumers appeared to come out in force doing last-minute shopping before the Christmas holiday.” According to the piece, the International Council of Shopping Centers and UBS Securities LLC reported that sales were up 2.4 percent for the week ending December 17. What’s more, Reuters noted, “compared with the same week a year ago, sales were up 3.9 percent, after a 3.2 percent rise in the prior week.” The Associated Press, meanwhile, reported this morning that although “retailers are expected to increase discounting in the final days before Christmas,” a study by ShopperTrak RCT Corp. found that sales had surged 16.9 percent for the week ended December 17, compared to the prior week. In addition, sales were up 2.1 percent over the same period a year ago.
And then Bloomberg, which yesterday reported that investors were predicting doom for the retail sector, followed up today with a story noting that retailers’ online sales have been strong, rising a full 23 percent — to $15.9 billion, from $12.9 billion last year — during the period from November 1 through December 16.
Now that’s a trend — one that can be read from tangible numbers. It deserves a lot more attention than the twitching of a few nervous stock whizzes.
Paul McLeary is a former CJR staff writer. Since 2008, he has covered the Pentagon for Foreign Policy, Defense News, Breaking Defense, and other outlets. He is currently a defense reporter for Politico.