NEW YORK: A man walks by a branch of US electronic giant retailer Circuit City with advertisements announcing the entire store on sale prior to the closure of the branch here on Friday. With government figures showing national retail sales down 4.1 per cent in October, shops are slashing prices in a desperate search for customers. Regular stores are offering 50, 60 even 80 per cent discounts in a scramble for an ever-dwindling band of shoppers.

Consumer stalwarts JC Penny’s and Neiman Marcus posted big losses in the third quarter, while venerable department store Macy’s lost $44 million and Circuit City declared bankruptcy. Moody’s Economy.com sees the worst retail season in 15 years. Among the few retailers in good shape, market watchers say, are inexpensive stores like Wal-Mart, online sellers and second-hand shops.

One shoe shop in Manhattan’s trendy village neighborhood has a “recession sale,” while women’s clothes chain Ann Taylor is putting on a brave face, with signs insisting: “There will be parties.” But Moody’s warns that consumers will not be easily lured.

“Unemployment is rising, household wealth is falling, and credit conditions are tight,” it says. “Squeezed from all sides, consumers are being frugal.” That’s not just bad news for retailers, but for the US economy at large. Consumer spending accounts for about two-thirds of US economic activity, with the Christmas gift giving season a key contributor.

The United States is not yet technically in recession — that milestone is likely to be announced early next year — but at ground level the fear is already real.—AFP