Main Street delivered another wallop to Wall Street on Thursday with news that many of the country's best-known retailers have been struggling with dismal sales and see little hope for improvement in the months ahead.
At department stores, luxury chains and specialty retailers, September was a grim month as the worsening economy and credit crunch hammered consumer spending.
Many reported substantial sales declines Thursday at stores open at least a year -- a measure of retail health known as same-store sales. Some companies reported their sales Wednesday.
Stores such as Gap Inc., Abercrombie & Fitch Co. and Neiman Marcus Inc. all posted double-digit declines, while discounters Costco Wholesale Corp. and Wal-Mart Stores Inc. reported gains that still fell short of analysts' expectations.
To make matters worse, analysts are worried that consumers will pull back even more as the fallout from the financial meltdown continues to filter through the economy. The holiday season in particular could be in jeopardy as shoppers cut back on buying presents for their family and friends.
"It's going to be one of the worst in probably a couple decades," said Ken Perkins, president of research company Retail Metrics Inc. "Consumers are tapped out."
Tight consumer spending is hurting not just the retail giants but independent stores as well.
At Wacko, a specialty toy and gift shop in Los Feliz, owner Billy Shire is gearing up for a gloomy holiday season. Usually, he can count on a flood of customers during November and December, but this year, he's not so sure.
"Business has been down all year," said Shire, 57. "I don't know what the heck to expect for the next months and for Christmas. . . . We're just wondering if Christmas is coming -- if anything is coming."
Nationwide, sales rose just 1% in September compared with a year earlier, according to the International Council of Shopping Centers' tally of 36 chains.
"This was the weakest sales growth of any September since 2001, when the industry was in a recession and facing the aftermath of 9/11," said Michael Niemira, chief economist for the shopping center group. He predicted that year-over-year sales for October would also be sluggish.
Heavy markdowns and promotions last month did little to entice wary shoppers, who again reduced discretionary spending in favor of buying only the basics.
