Editor's Note: The following is a story appearing in the Oct. 5 Wall Street Journal. http://online.wsj.com/article/SB125470031540363025.html?mod=djemITP
Retailers and analysts will be closely watching September sales reports due Thursday from key store chains for any sign they may need to adjust their already-gloomy holiday forecasts.
Two analyst reports predict that Christmas-season sales will be flat with last year's dismal results while a third projects they will fall 1%. Stores have been slashing inventories in hopes they can avoid profit-sapping price cuts.
Retailers also are planning plenty of bargains to lure thrifty holiday shoppers. Wal-Mart Stores Inc. says it will offer about 100 toys priced at $10 -- compared with just 10 such toys last year. Consumers are still "under a lot of pressure," said Wal-Mart's chief executive, Mike Duke.
For consumers, "it's a badge of honor to not spend as much as they used to," Linda Heasley, CEO of specialty retailer The Limited, said at a retail conference in New York last week.
Analysts are looking to the September sales figures for stores open least a year -- a key measure of retailers' health and consumer spending -- for clues about Christmas. These results are predicted to fall 1% to 2% compared to September 2008. That would be a harbinger of a season filled with bargain hunting and last-minute gift shopping.
The projected September decline is particularly worrisome because a late Labor Day and later school-start dates helped boost the month's sales, and a decline in September sales last year makes year-ago comparisons easier.
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