The worst holiday retail season in decades

Although none of us will know it until December is over, this month is expected to be quite the month to forget in terms of retail volume. Consumers are keeping those wallets zipped up with the economy still teetering on eggshells, more than half a million jobs lost in November alone and with a new U.S. President about to take office next month. Scared? You are not alone -- and the consumer dollars that run two-thirds of the largest economy in the world are being pulled back in record fashion.

But then again, 300 million have to eat, clothe themselves and buy some holiday gifts this December. The difference is that all of them have to do that at the most affordable prices possible. Gas prices aren't the problem -- they are the lowest on almost five years as of this past weekend ($1.49 in my area). Even with huge decreases in gas prices, the housing market is still trying to pick itself off the ground, credit is still dry for millions of us, the job market is in shambles at the moment and 2009 expectations are for a continued messy economy. Are you ready to drop $80 on a polo shirt at a trendy department store, or would you prefer the $17.97 kind at a local Wal-Mart?

Wal-Mart's safety net never disappeared

Wal-Mart's same-store sales gain for November was 3.4% -- a whopping increase over the 2.1% analysts predicted. Wal-Mart's bright results don't signal a turnaround for retail in any way, shape or form. It does signal, however, that more and more customers have moved from other, higher-priced retailers and continue to take refuge inside Wal-Mart's doors.

November retail sales were the slowest since 1969, yet Wal-Mart bucked the trend in a large fashion. Is Wal-Mart the only retailer that may come out of December unscathed? If so, it will be a watershed moment for retail all things considered. Along with the precarious economy that's jumbled into indecipherable puzzle pieces, Wal-Mart's position as the savior of millions of American families this season may give it a status it's rarely seen before. Sure, Wal-Mart has always seen a steady following from its core customer base, but the end of 2008 may be the one time in the last 20 years that a whole new group of customers will have a new-found respect for the retailer.

It's quite a prediction that once the economy improves, customers will go back to old habits and trade up to more expensive, trendier stores for their needs. So far, the incredible drop in gas prices has not caused American shoppers to throw the concept of the economy car or the hybrid vehicle under the bus. Far from it -- automakers are more focused on ever on providing adequate, value-focused transportation products that will begin to wean this country's drivers from their gas-consuming, overindulgent habits. The American car buyer won't be going back to huge vehicles. This saying comes to mind: Fool me once, shame on you. Fool me twice, shame on me. Will the same effect hold true for Wal-Mart? As in, when the U.S. economy improves, will the legions of newer, more frequent shoppers who have become Wal-Mart fans recently dump the retailer and head back to their expensive, profit-margin-laden retailers?

Wal-Mart's defining moment

2010 will be an interesting year. By then, the recession currently being felt by the U.S. will hopefully. be over, all of these bailouts will be underway (or completed), we'll have had a new President for the better part of a year and the economy will be somewhere on the path to recovery. Will Wal-Mart have gained a new appreciation for having "been there" for the U.S. consumer during the belt-tightening months of late 2008 and all of 2009? If so, the retailer will grow even more powerful in the U.S. (and internationally, of course). It is, right now, Wal-Mart's time to shine so that efforts to help more and more customers "save money" and "live better" will beget huge rewards in the years to come from increasing amounts of loyalty. It is the retailer's game to win or...win.

Join me right here next week for another edition of the Wal-Mart Weekly. Stay safe out there this week.