2.4 Percent: 'Dramatic' Decrease or 'Disappointing' Increase?
According to MasterCard SpendingPulse, retail sales were up 3.6 percent during the holiday season – 2.4 percent excluding gas prices. But because it’s not as big an increase as recent years have produced, the media reported it as bad news.
According to MasterCard SpendingPulse, retail sales were up 3.6 percent during the holiday season – 2.4 percent excluding gas prices. But because it’s not as big an increase as recent years have produced, the media reported it as bad news.
On NBC “Nightly News,” reporter Savannah Guthrie announced a “dramatic” 2.4 percent decrease in women’s clothing sales. A decrease was “dramatic,” but the same percentage increase was apparently nothing to be happy about. Guthrie called it “disappointing.
During “The Early Show” on CBS the morning of December 26, anchor Maggie Rodriguez delivered a slip up that could contribute to negative perceptions of the shopping season. She said gift cards, a popular item this year, are “not redeemed very often.” However, CBS’s Seth Doane had just reported that only one in five gift cards are not redeemed, amounting to about $5 billion revenues for retailers.
Other news outlets also presented the growth as disappointing news:
On the CBS “Evening News,” Seth Doane informed viewers the season had been “dismal” until an impressive 19 percent bump in shopping the weekend before Christmas.
On NBC’s “Today” show Wednesday morning, Margaret Brennan called the 2.4 percent increase “small” but “important.” She painted a dire picture for retailers, which she said “need this post-Christmas binge in order for them to meet their sales goals.”
On ABC’s “Good Morning America,” Ryan Owens said the 3.6% increase is “the smallest in four years, a clear sign that the economy is slowing down.”
The New York Times’ headline called spending “weak.” The article by Michael Barbaro blamed the “bleak” season on consumers who were “uneasy about the economy and unimpressed by the merchandise in stores.”
To their credit, the major outlets also noted that the news will probably get better as consumers hit the stores for post-Christmas shopping. That will give shoppers the chance to cash in gift cards and hopefully spend more on top of the gifts.
The Wall Street Journal reported that “last year, January sales made up 25 percent of the three-month period’s total, up from 23.6 percent in the 2000-01 season, according to ShopperTrak.”
“The Early Show” featured an interview with Scott Krugman of the National Retail Federation (NRF),” who predicted post-Christmas sales “will be enough to save Christmas for retailers.” He said the NRF believes its prediction of a 4 percent increase over 2006 sales will be met when the dust settles.
Even The New York Times mentioned that “shoppers will spend up to $60 billion over the next seven days, as they redeem gift cards and exchange unwanted ties and sweaters for items they truly want.
Other outlets also noted the potential for further increase:
NBC’s Guthrie said, “Consumers spent more than $25 billion dollars on gift card this holiday season, and those don't count as sales until they're actually redeemed.” (According to the Journal, however, MasterCard’s data does include gift card spending.)
On “Today,” Brennan said, “Whether Christmas was merry for stores now comes down to the post holiday binge of bargain shopping, returns and exchanges and there's a wild card that may help stores meet sales goals.”
On ABC, Owens noted that “61 percent of us gave gift cards this year. They're fueling the new shopping season and could total $28 billion in spending.”
CNN’s Ali Velshi reported on the 3.6 percent increase during his segment on “American Morning,” adding that “over the course of the next few days we’ll get different numbers.”
While much of the media did acknowledge that the week after Christmas plays an important role in holiday shopping numbers, they stuck to downplaying positive growth as a sign of economic woe.
Only Investor’s Business Daily put the story into real perspective, quoting PriceGrabber.com CEO Ron LaPierre, who pointed out that “even with a slowing growth rate, the dollar amounts are rising in the billions” and “the fact that e-commerce can generate $4 billion more in sales than it did this time last year is very promising.”
