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Retail Throws a Hail Mary

And the peak of the season is still to come. This Saturday is expected to be the busiest shopping day of the year for retailers, eclipsing Black Friday.

Chen expects those retailers who have been promoting all along will continue promoting, including in the women's apparel sector, which saw soft sales even before the holiday season began.

According to a holiday report released by MasterCard, sales for women's apparel was down 5.7% in the first 20 days after Black Friday. But there was a 4.5% increase in men's apparel.

Chen says she expects teen retailers like Aeropostale (ARO) and Abercrombie & Fitch (ANF) to hold their own. But she acknowledges that expectations are low for everyone.

Even online sales seem to be losing some traction. According to research firm, comScore, online retail spending has grown more than $22 billion between Nov. 1 and Dec. 14, which marks an 18% climb. While that still represents a record level, it is less than the 26% increase during the same period last year.

Part of that can be attributed to a decline in spending by lower-income households. For instance, households earning at least $100,000 increased their online spending by 28% compared with a year ago, according to comScore. But households earning less than $50,000 increased their spending only 10%.

"The current economic realities appear to be having a negative impact on the growth in consumer spending," said comScore Chairman Gian Fulgoni in a statement. "From the subprime housing meltdown to a decline in home values to higher gas prices and an uncertain stock market, many consumers across all income segments are either feeling the pinch this holiday season or are lacking the confidence to spend at the rate they had in the past."

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