Does this scenario describe you over the next few days: at the mall, standing in line as you struggle with all those shopping bags containing presents which will be left under the Christmas tree?
It's the vision retailers are happily painting this year and industry trade groups are more than eager to proclaim that this holiday season - the most important time for retailers - is wildly beating expectations. Retailers, desperate to bring in business and allure customers to the stores, made an unprecedented decision to open their doors on Thanksgiving Day. As if waiting in line at 5 a.m. for door busters wasn't terrible enough, many families cut short their Thanksgiving dinners to push, shove and fight other shoppers for just one of three high-definition televisions advertised at ridiculously low prices.
We hosted our very own retail boxing match here on The Daily Ticker set with Aaron Task as the announcer. Breakout's Jeff Macke and Fusion IQ's Barry Ritholtz are good friends but when it comes to retail, they can't seem to agree. The two sparred just a few weeks ago here on the show, debating the retail numbers promulgated by the National Retail Federation and comScore. They've decided to come back and settle their differences once and for all.
Meet The Contenders
In the red corner, Jeff Macke, a former manager trainee at Macy's who grew up in Target stores (his father was CEO), has a wicked left hook and says the U.S. consumer is strong, alive and well, and nothing - not even Europe's debt crisis - can bring the consumer down.
In the green corner, Barry Ritholtz, author of "Bailout Nation" and a well-known market strategist, brings a mean straight right and argues that midnight and Thanksgiving openings show retailers are struggling for sales, "mad discounting" signifies a lack of consumer enthusiasm and Christmas will be mediocre, at best.
Let's go to the numbers...
In defense of Macke:
-The National Retail Federation (NRF) revised its holiday sales forecast to a gain of 3.8% from its original prediction of 2.8%.
-ShopperTrak also upgraded its holiday forecast to a gain of 3.7% from 3%.
-comScore reports U.S. online holiday sales are on pace to beat last year's sales and online retail sales have risen 15% in the first 48 days of the holiday shopping season.
-Nike reported Q2 earnings rose on higher sales, marking a one-year improvement in sales and revenue.
In defense of Ritholtz:
-The U.S. government reported November retail sales increased a paltry 0.2% - a drop off from October's 0.6% increase and below the 0.5% estimate.
-Best Buy, one of the largest electronic retailers in the country, reported Q3 quarterly income fell 29% because of discounts and a lack of demand for consumer electronics.
-The New York Times published a story that pawn shops are seeing a surge in business this year as many people cannot even afford to shop at Wal-Mart, Target and dollar stores.
-Target reported soft earnings for the second quarter and high-end jeweler Tiffany & Co. warned that margins in the current quarter will be smaller than expected
In just a few weeks Macke or Ritholtz can claim the title when the final retail tallies are released. Macke holds his ground, asserting that the consumer "is not dead" and it's not wise to underestimate consumers, even in the face of high unemployment, stock market volatility and global economic concerns.
Ritholtz says the upbeat retail numbers over the past two years are things of the past as stimulus money starts to fade. "If we are going to rely on holiday shopping, on the resurgence of consumer spending, to get us out of this morass" we're in trouble, he says.
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