In more bad news for punch-drunk retailers, sales tumbled 2.8 percent in October, the sharpest decline on record.
The Commerce Department report, issued last month, blamed lower gas and car sales, but a far broader weakness was detected.
Clothing sale were down 1.4%, sporting goods down 1.6%, furniture 2.5% and electronics 2.3% month over month.
All of this foreshadows a Scrooge-like holiday season for retailers, according to a new Wall Street Journal blog tracking holiday retail news.
Robert Dye an economist as PNC, told the blog that “Wal-Mart and other bargain stores may gain market share as shoppers avoid higher-end department stores, but most retailers will feel the bite of weaker consumer spending.”
Household names like J.C. Penney and Nordstrom warned of a rough road ahead, according to the blog. Penney’s said its profit slid 52% on falling sales and the department-store chain projected results for the holiday period well below analysts’ expectations and Nordstrom lowered its business forecasts on the same day.
One problem seemed to be recession-weary consumers holding tight to their money, hoping for steals and deals to come closer to Christmas.
“With some large retailers already starting holiday promotions well ahead of usual, the waiting game this year could be especially severe,” David Resler, an economist at Nomura Securities, told the Holiday Sales Blog.
His forecast for future was equally dire: “A consequence of the weak holiday shopping season may well be an increase in bankruptcies by retailers after the first of the year,” Resler said.
This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to email@example.com.