Brace yourself for a retail whiplash
Analyst say same-store sales numbers from leading retail chains may show the weakest performance since 2000.
NEW YORK (CNNMoney.com) -- Leading retail chains are poised to report the worst monthly sales in eight years on Thursday in another solid sign of an economy in distress.
Analysts expect October same-store sales, or sales at stores open at least a year, to show a 0.3% decline, according to Thomson Reuters.
If the figures come in as expected, the monthly decline would mark the the weakest same-store sales results ever registered since Thomson Reuters first started tracking the estimates in 2000.
Year-to-date, same-store sales have risen just 1.8%. And on a year-over-year basis, each month from January through September showed declines.
Excluding Wal-Mart, who's low-price discount model has enabled it to weather the consumer spending slump better than its rivals, last month's sales are predicted to have slumped as much as 2.3%.
The results in October would cap an already excruciating sales year for merchants whose business has suffered as more Americans clamp down on their discretionary purchases in light of a shaky economy and job market.
Consumer spending is a key component of the economy since it accounts for two-thirds of the nation's economic growth.
Subsequently, deteriorating retail sales mean the economy may get even worse because "we can't expect consumers to pull us through this downturn like they have in the past," said Stevan Buxbaum, retail analyst with consulting firm Buxbaum Group.
All the economic challenges that confront Americans today have "finally broken the habit of consumerism in this country," he added. "We're not buying two of everything now but making do with one."
Buxbaum's assessment was supported by a new monthly consumer spending survey released Wednesday from credit card issuer Discover Financial Services (DFS) which showed that a majority of 15,000 Americans polled, or 60%, rated the economy as "poor," and 79% said they had not increased their [discretionary] spending even as gas prices has eased.
"October's [survey] numbers show consumers are clearly hunkering down to ride out the economic and financial crisis," Margo Geogiadis, chief marketing officer of Discover Financial Services, said in the report.
"All the negative news about bank rescues, job reductions, mortgage foreclosures and stock market volatility are giving consumers no reason to abandon the caution they've employed in terms of their spending," Geogiadis said.