Transcripts

Retailers vs. The Recession

SUSIE GHARIB: With just five shopping days to go before Christmas, stakes are high for the nation's retailers this holiday season. So far, cash registers have not been ringing up many sales as consumers grapple with the worst recession in decades. And as Suzanne Pratt reports, experts say even massive promotions still won't have retailers seeing green.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: 'Twas the weekend before Christmas and all through the store, few shoppers were spending and desperate retailers wanted more. Sales and promotions were offered with care in hopes that consumers would soon be out there. Economist Mike Niemira says this Saturday, now known as super Saturday, will be busy, at least in terms of store traffic.

MICHAEL NIEMIRA, CHIEF ECONOMIST, INTERNATIONAL COUNCIL OF SHOPPING CENTERS: Despite some of the stories about weather around the country, I think the day will still -- Saturday will be the largest, the biggest shopping day of the year.

PRATT: That's because holiday shoppers are typically huge procrastinators. And according to the National Retail Federation, it's true this year, too. Twenty percent of Americans have not yet begun to shop. Men and adult consumers under the age of 35 are the biggest procrastinators, by group. But S&P retail analyst Marie Driscoll says even last minute shopping will not save this abysmal holiday season.

MARIE DRISCOLL, RETAIL ANALYST, STANDARD & POOR'S: We're looking for a decline of about 5 percent and the reason for that is there's fewer Christmas days, the amount of promotional shopping and a spooked consumer, a consumer who really is not out there.

PRATT: The desperation of many retailers is evident in the abundance of sales, not to mention the steep discounts. On New York's toney Fifth and Madison Avenues, many stores are empty. In past years, 65 percent off before Christmas was unheard of. In the 2008 economy, it's a common occurrence.

DRISCOLL: The retailer is virtually buying these sales. They are giving them away. They're hardly making money on any of these sales. When you see Saks having 60 to 80 percent off, they are just trying to move goods. And it's hard to grow your top line when you're discounting 60 to 80 percent.

PRATT: Retail experts say the next chapter of this unhappy tale is likely to be the going out of business sales. After the holidays, when retailers run out of cash, thousands of shops are expected to close their doors for good. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.