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Why Those Holiday Spending Forecasts Are Total BS

Consider the following claims and forecasts regarding 2012 holiday retail spending:

  • The NRF forecasts that “American shoppers will spend just under $750 on average on their holiday purchases this year, up slightly from the nearly $741 spent last year.”
  • Nielsen forecasts 2012 holiday spending to hit $98.3 billion.
  • Comscore expects 2012 online holiday spending to come in at $43.4 billon.
  • A survey from the National Foundation for Credit Counseling (NFCC) revealed that “50% of consumers intend to spend less on holiday purchases this year than last, while 37% plan to spend nothing at all. “

My take: Something doesn’t add up here.


The first challenge is provided by the NRF forecast. When it says “American shopper” does that mean individual or household? If individual, what age range are we talking about? Just adults, or does it include teens?

If it’s households, then the NRF forecast comes out to about $86 billion, a bit lower than the Nielsen forecast, but in the same ballpark.

If we’re talking individuals (and just adults), then at $750/person for the 221 million adults, the NRF forecast comes to roughly $166 billion, 69% higher than the Nielsen forecast.


So I guess we’re talking about households.

But hold on.

Comscore’s forecast of online holiday spending — $43 billion — represents half of the NRF forecast. I know a lot of people of buying online these days, but is the online channel really going to account for 50% of holiday sales? Seems a bit too high for me.

So maybe the NRF “shopper” estimate is for individuals, and Nielsen has its head in the sand.


That could make sense looking at the input from NFCC.

It says 37% of “consumers” won’t spend anything at all.

Damn. Is “consumers” households or people?

If it’s individuals, total spending would be $104 billion, a little higher — but in line — with the Nielsen forecast. If it’s households, though, then at $750/shopper (or consumer), total spending will only reach $54 billion. Which is nowhere close to anybody’s forecast except for Comscore’s, which only includes online purchases. 


The NRF says that the $750 that the “average” shopper will spend this year is up slightly from the $741 they spent last year.

But the NFCC found that 50% plan to cut back on spending, 11% will stay the same, and just 3% said they would spend more.

That would mean that those 3% are planning to spend a HELLUVA lot more for the $741 number to rise to $750.


So how much are Americans going to spend during the holiday season this year?

Don’t ask me.

Maybe Nate Silver’s got a forecast.

Ron ShevlinRon Shevlin is a senior analyst at Aite Group, a Boston-based research and advisory firm serving the financial services industry. Ron is a frequent speaker at industry events and bank and credit union strategic planning sessions. His soon-to-be released book, Smarter Bank: Why Money Management is More Important than Money Movement to Banks and Credit Unions will be published in January 2015. Ron's popular blog, Snarketing 2.0, is now a permanent fixture here at The Financial Brand. You can follow Ron on Twitter.

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