Friday, December 26, 2008

Pay no attention....

We will be hearing a lot of reports about sales over the coming days and weeks.

I'm going to pretty much ignore them. Frankly, anecdotal evidence is probably as valuable or accurate.

1.) I don't believe them.

Sure, corporations have to report accurate numbers to their shareholders, but I'm not sure those are the numbers we're getting through the media. We're getting spun numbers -- pick and choose numbers. Besides, who pays attention to corrected numbers, later? There are stores who are going to try to make it worse than it is, and stores that will try to make it better; depending on what they're trying to accomplish.

And if it's true that most business is done by 'small' business, there really isn't any way you can convince me that you get accurate numbers through credit card transactions or whatever.

2.) They're meaningless.

If I gave you an overall average temperature for the entire country, what could you learn from it? I'm not sure an overall sales % is any more useful. Numbers are going to vary by industry, region and town.

3.) They're the wrong numbers.

Sales don't mean much. Profits mean everything. If it's true that everyone was heavily discounting, then the overall sales are even more meaningless.

4.) They're skewed by the big box stores.

If Walmart can bring 6.4% declines back up to 2% declines, as I was reading the other day, then what can Walmart, Target and a dozen other big retailers do to the numbers? Like I said, the numbers probably only reflect chainstores, anyway.

5.) The only numbers that really count, are MY numbers.

I'll tell you how we did at the end of the month. But that is all I can tell you.

6.) The numbers are ridiculously small.

Which makes me doubt them completely. What I'm hearing locally are numbers more in the range of 30 or 40 and even 50% down, not 2 or 3 or 5% down. Something stinks.

I suspect that statistics are just being manipulated. That the world of retail is just too big and diverse to really get a true handle on.

Like I said, I'll let you know. But whatever number I finally arrive at, the only thing that really matters is how my store is doing overall. Whether it's turning a profit, whether it has positive cash flow, whether the store is kept up in both inventory and infrastructure, and whether services can continue to be paid. And on that basis, Pegasus is pretty strong.

What's interesting is, I planned for the worst. And the worst wasn't just a bad Christmas season, that was a given, it was a bad Christmas season, PLUS a blizzard, and that's what we got. That's what worst case scenario planning is about.

Sales can suck, and it doesn't matter. Sales can be huge, and it doesn't matter.
I've seen it both ways. As long as you are a viable store with customers, sales are almost the least important stat.

O.K. O.K. Well, sales do matter, and perhaps because they aren't strong I'm in the mood to minimize their importance. But I think its true that sales sometimes become a video game number, with lots of flash and glamour, which grabs the media and the publics attention, but which distracts from the more important number -- profit. And then profit becomes yet another glamour number, perhaps hiding the basic weakness of the store (weakened inventory and infrastructure, lack of adequate resources, lack of adequate staffing, etc. etc.)

And in those most important categories, I feel pretty good about Pegasus Books.

So don't pay too much attention to the "Sales" numbers, except maybe as an overall indication of the business climate.

1 comment:

RDC said...

Keep in mind that even at -3 to -5% (not including automobiles and gasoline) is an epic reduction that has not occured since the current tracking system was being put into place.

While they are probably not good quantitative numbers they are probably pretty good at identifying qualitative trends. The key one being that as bad as October and November were, December so far has been worse.

All signs point to the recession continuing to steepen, with commercial real estate being the next shoe to drop.