Fitch Ratings Offers Cautious 2010 Retail Outlook

NEW YORK (AP) — Fitch Ratings expects sales at stores open at least a year to rise slightly this holiday season after last year's sharp falloff, the credit rating agency said Monday.

Sales for 2010 are expected to continue at the same sluggish pace, because shoppers likely still will be grappling with high unemployment and tight credit, Fitch said in an industry report. Sales at stores open at least a year are a key indicator of a retailer's health.

The good news is that liquidity has improved dramatically for many U.S. merchants from a year ago. That means the industry won't see the wave of bankruptcy filings seen in 2008 and early 2009 as stores have been able to refinance their debt.

Low-price retailers like Wal-Mart Stores Inc. are expected to remain the bright spots, as shoppers scour for deals and focus on necessities like food.

Department stores' sales at stores open at least a year are expected to fall 4 percent in the fourth quarter and 6 percent to 7 percent for all of 2009. In 2010, that measure is expected to decline by 2 percent to 3 percent compared with 2009 amid economic pressures and stiff competition from discounters.