Someone Spiked Amazon's Eggnog Again

SAN FRANCISCO -- Who are you going to believe about this year's holiday sales -- Amazon.com(AMZN) or MasterCard(MA)?

As traditional as television's Yule Log, Amazon has once again taken the day after Christmas to announce that this season's sales -- the company's 14th -- were its "best ever."

You don't say.

Predictably, shares of Amazon shot 5% higher in early Friday trading, before pulling back to $52.55, up 2.2%.

Let's see, it was only ... well, one year ago exactly when the company told the world that last year's holiday sales were -- you guessed it -- the company's "best ever." On Dec. 26, 2007, Amazon shares closed up 2%. Looking back, would you have wanted to pick up Amazon then at $92.85?

The definitive debunking on this annual PR push by Amazon was done last year by uber-blogger Jeff Matthews, who pointed out, as he did a year earlier, that it what would be startling news if Amazon, or practically every other retailer, didn't report sales that topped a year ago.

This is because economies and businesses tend to grow, and tend to experience some degree of inflation, making total sales an essentially useless metric for looking at retailers. That's why the focus is usually on same-store sales -- sales at outlets that have been open for at least a year.

Data out Friday from MasterCard's SpendingPulse unit, paints a somewhat less sanguine picture. As Reuters reported, the 2008 holiday shopping season was the weakest in recent memory, as consumers cut spending in the wake of recession, mounting job losses and tighter credit. "It's probably one of the most challenging holiday seasons we've ever had in modern times," said Michael McNamara, vice president of Research and Analysis at MasterCard Advisors.