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Retailers bracing for a blue ChristmasShopping season shaping up to be weakest in decade
NEW YORK (CNN) -- With just one shopping day left before Christmas, retailers are reeling from what is so far shaping up to be the worst holiday shopping season in a decade. While sales were robust during the weekend after Thanksgiving, consumers grew cautious about spending money in the ensuing weeks, despite deep discounts and promotions. And the bad news has begun to pile up more quickly than presents under the tree: • Federated Department Stores, which owns the Macy's and Bloomingdale's chains, announced Monday that it would not make its seasonal targets because sales last week did not strengthen as much as anticipated. • Wal-Mart, the nation's biggest retailer, said sales for December are slightly below expectations. • Sears, which offered a 10 percent discount on everything in its stores last Saturday, is still expecting a sales decline for the holiday season. • Two electronics retailers, Best Buy and Electronics Boutique, reduced earnings expectations for the fourth quarter last week. • Icon toy retailer FAO Schwartz is struggling, and KB Toys said that while traffic was strong, sales are only up slightly from a year ago. Retail analyst Kurt Barnard said last weekend's sales were disappointing, despite store promotions. The Saturday before Christmas traditionally is regarded by many analysts as the busiest shopping day of the year. "A lot of stores told us that when they opened at 7 or 8 in the morning with special deals good for two hours, crowds were beginning to mass. But at the stroke of 9, when those sales were supposed to end, the crowds disappeared like a snowflake in the palm of your hand," Barnard said. Barnard is still predicting the season will have a slight sales increase, 2 to 2.5 percent, over last year. But that would be the lowest projected increase in more than a decade. In a sign of the times, some retailers have already mailed out fliers advertising steep discounts starting on December 26. "Retailers are going to switch from pure discounts and more into clearance sales," said Scott Krugman of the National Retail Federation. "That means they're really going to be looking to push this stuff off of the shelves, and that certainly means that consumers are going to see a lot of great bargains." -- CNNfn Correspondent Kitty Pilgrim contributed to this report.
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