Nearly every product category is expected to see declines, with clothing taking a rather big hit. Notice I said "nearly," because electronics is expected to see an 11% gain -- thanks mainly to lower prices for laptops and desktops for the older shopping demographic (including college students).

The NRF believes that the average family with a child in kindergarten through 12th grade will cut its spending by 7.7% to $548.72. College students are expected to increase their spending by roughly 3% to $618.12. Nearly three out of five college students are going to live at home this year -- up from 54.1% living at home a year ago.

Is this expected drop in back-to-school sales a shock? Not necessarily, I mean when you are charging $75 for a pair of jeans and $25 for a Twilight-themed t-shirt (to show just how emo you are), you have to expect sales to drop. Teen apparel firms are going to feel the worst of this, as some shoppers have stated they plan to buy more store-brand and generic products.

Who could benefit? Wal-Mart Stores (WMT), Target (TGT), possibly Kohl's (KSS) and the likes. These stores offer good prices on quality products, and tightened purse strings lead to a more frugal shopper. Like Ken Perkins, I am concerned about the holiday shopping season. Some politicians and financial experts are declaring that we have further to go before the economic recovery settles in, I believe these statistics back that up. The problem is, even when we emerge from the current crisis, will retail lead the way or even be pulled along for the ride?

Consumers are scared, and this is going to lead to a continued vice grip on wallets -- which is not good for retailers in general. Expect more pain in the high-end retail sector for a bit longer folks. If you are looking to make a bullish play in retail, you may want to look for bargains in the world of bargains.