Retailers Caught Flat-footed by Rapid Economic Slowdown

It's Black Friday, will they come? Black Friday a term linked to the fact that traditionally all retailers "make their year" by blasting into profitable territory for the entire year on the strength of holiday sales. This year may be a stark contrast.

All indicators point to retailers experiencing there first year where current year sales don't exceed the previous year. Caught completely off-guard by an aggressive meltdown of Wall Street in late September, early October the traditional kick-off of holiday retail season.

September and October's further bad news of exploding job losses, frozen credit, and continuing housing market collapse has consumers dramatically cutting their spending.

ComScore reveals that households earning less than $50,000 have reduced their purchases by 3 percent, while those earning between $50,000 and $100,000 have only increased their spending by 1 percent for the holidays.

The AAA motor club reveals in their survey that consumer savings include traditional holiday travels. Thanksgiving travels are expected to drop by 1.4 percent from last year, the lowest since 2001.

There have been a few silver linings early in the season as high-end electronics have turned in some strong, pre-holiday quarters. The likes of HP and Apple have dramatically beaten analyst forecasts in the third quarter, but both have lightened expectations going forward.

So, it looks like it is going to be a stay-at-home holiday with few gifts around the tree in 2008, with lots of hope and expectation of 2009.