Retailers -- with Wal-Mart the notable exception -- limped through a miserable November that even a surge of shopping after Thanksgiving couldn't save, marking the weakest month since at least 1969 and deepening fears that the critical holiday period could be the most dismal in decades.
As merchants announced their November sales figures Thursday, the deep malaise cut across all sectors as shoppers worried about layoffs and shrinking retirement funds focus on necessities.
Wal-Mart was the only big retailer to show a sales increase in November, as it draws more shoppers by focusing on selling basic goods at low prices. Wal-Mart reported a 3.4 percent gain in same-store sales.
Costco Wholesale Corp., usually a strong performer, reported a bigger-than expected sales decline.
Most mall-based chains and department stores such as teen stalwart Abercrombie & Fitch, Kohl's and Macy's fared much worse, reporting percentage declines of more than 10 percent.
"It's an awful beginning to the holiday season," said Michael P. Niemira, chief economist at International Council of Shopping Centers. "This is going to be a difficult holiday season for most retailers. There are going to be more bankruptcies."
He predicted that the retrenchment in spending will linger for at least another six months.
According to the Goldman Sachs-International Council of Shopping Centers index of 37 stores, sales dropped 2.7 percent for November, making it the worst month since at least 1969 when the index began.
“It's an awful beginning to the holiday season.”Michael Niemira, International Council of Shopping Centers
Like most retailers, Minneapolis-based Target had a miserable November.
Target saw a spike in shopping after Thanksgiving. But for the entire month, sales at stores open for at least one year were still down about 10 percent.
Target has been slashing prices on lots of goods to get consumers into stores. Dave Heupel, a retail analyst at Thrivent Financial for Lutherans, says that strategy will eat into Target's profits.
"While it seemed like Black Friday and the subsequent weekend saw some pickup, it was really based on what was marked down considerably," said Heupel. "So, the traffic we are seeing is really value-driven, and will probably have an impact on profitability for Target and the rest of the retail group."
Sales data from the Thanksgiving weekend showed a buying binge on Black Friday, but shoppers retreated the rest of the weekend.
And even at the stores on Friday, they focused on bargains and on small-ticket purchases as they slash their holiday budgets, meaning only modest sales gains for the weekend.
Now concerns are growing that shoppers won't return to malls until the final days before Christmas, making the typical lull between Thanksgiving weekend and the final days before Dec. 25 even more pronounced as shoppers wait for the best deals.
Many stores blamed their weak November figures in part to a quirk in the calendar -- a late Thanksgiving means that the month's reporting period does not include a whole week of post-holiday shopping compared with a year ago.
Niemira estimated that factor depressed November figures, and will benefit December, by 1.5 percentage points to 2.0 percentage points.
But clearly, the deteriorating economy is wreaking havoc on consumers, who since mid-September have basically snapped their wallets shut. A big concern is layoffs, which are only expected to increase in months ahead.
Excluding Wal-Mart's results, the industry's same-store sales fell nearly 8 percent.
Costco reported a 5 percent decline in same-store sales, larger than the 2.4 percent drop analysts expected. Excluding the effect of lower gas prices and currency fluctuations, the wholesale club operator would have posted a 3 percent sales gain.
Among department store operators, Macy's Inc. reported a 13.3 percent drop in same-store sales for November, while Kohl's posted a 17.5 percent decline. J.C. Penney's same-store sales dropped 11.9 percent. Upscale Nordstrom Inc. posted a 15.9 decline.
Gap Inc. reported a 10 percent same-store sales drop, but company officials said that discounts were more aggressive than last year, a move that would affect merchandise margins. Still, the strategy allowed the company to "successfully clear through inventory in the month." The company reaffirmed its full-year profit outlook.
Teen retailer Abercrombie & Fitch, which has resisted deep discounting, saw a 28 percent same-store sales drop.
(The Associated Press contributed to this report)