Who are we supposed to believe when the figures are so discrepant?

I don’t know about you, but, being a journalist, I don’t like being forced to have a stab in the dark where really important information is concerned. You wouldn’t guess your profit, you don’t guess how much you’ve sold this month. 

Can someone tell me, then, how it can be the British Retail Consortium (BRC) and Barclaycard can have such wildly different ideas about how much consumers spent in the month of May this year? The BRC reports “flat” retail sales (that is, no increase compared with the same month last year), and Barclaycard says “consumer spending” enjoyed a 4.2% increase for the self-same period.

One is a picture of extremely disappointing economic stagnation, the like of which most in the business world are praying will not strike again for at least another 10 years. The other is manna from heaven; a veritable consumer boom sure to have us lapping our European counterparts on the economic racetrack faster than we already are.

So who is right? And why is the other so badly wrong? My first reaction is to accept Barclaycard’s analysis. After all, the bank’s computers know where transactions are being made and exactly what the money is being spent on. If they say consumers are buying more stuff, I believe them. You wouldn’t argue with a charity telling you how much it had taken in donations, or indeed you accountant telling you you were due a tax rebate.

The British Retail Consortium, on the other hand, provides its figures based on research. It surveys retailers and asks what how their sales ledgers are looking. So in a sense, they are also listening to the right people – retailers have no reason collectively to fudge their answers or give a mood-nuanced view: it’s just a straight question. How much have you sold? One hopes the BRC’s methodology is watertight and the samples are wide enough, given that everyone in the financial world listens to its views on how the retail sector is performing.

Worth noting is that Barclaycard is a provider of credit cards, and perhaps herein lies the answer. Watch what people are buying on their credit cards, and you’re likely to see the more frivolous stuff – electronics in particular enjoyed a huge boost in the timeframe we’re looking at – making an appearance. Ask retailers themselves how their sales going, and their answer will be diluted by all the consumers who have decided to be frugal, or whose credit cards are maxed out.

There’s a meaningful lesson here. Economic statistics make good fodder for mainstream and even trade press. They are perfectly legitimate stories, they come from reputable sources, and they (hopefully) say something important about how we’re doing as a nation, as a global community. But if the reader takes them in isolation, the message can appear to be very mixed indeed. Yesterday the news said retail sales are down, today the news said they are up. Neither is wrong, but context is required.

So here’s to context, and to a healthy dose of habitual scepticism where stories about statistics are concerned. And hopefully I’ve won some brownie points with the journalism gods by pointing it out.