A gloomier forecast comes from America's Research Group, a consumer research firm. ARG's telephone surveys indicate that "a retail train wreck" lies ahead, according to Britt Beemer, the firm's founder and chairman. Beemer, who says he has forecast retail sales within 0.5% for 17 of the past 18 holiday seasons, predicts that same-store sales in November and December will fall by 2.9%, compared with a decline of 2.7% in 2008.

Beemer says his pessimism stems from ARG research showing that only 2% of Americans are spending at an "unencumbered" level. The other 98% are encumbered by concerns about their jobs, onerous credit-card debt, or the loss of income and wealth in the stock market in 2008 — all of which "will cause them to spend a lot less," he says. "Normally 36% to 47% of consumers are unencumbered." As for holiday gift-giving, 51% of those surveyed by ARG in November said they will spend less on gifts this season, compared with 40% in 2008. (For more on anticipated holiday spending trends, see "The Quiz.")

Ironically, despite his own grim forecast, Wyss suggests that consumer surveys may overstate the gloom. "People always talk a good game [about cutting back]," he says. "Every Christmas people take these surveys, and almost every year they say they're going to spend less. And almost every year they end up spending more."

Even if the holidays don't equate to retail Armageddon, the long-term outlook for consumer spending remains bleak. Curtin predicts that consumption will expand by just 1.6% in 2010, while Nigel Gault foresees 1.5% spending growth (and 2.1% growth from 2009 to 2014). As for retail sales, Beemer doesn't see a return of consistent growth in monthly same-store sales until March or April of 2011.

Edward Teach is articles editor of CFO.

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