With a serious economic slump facing the nation, many retail outlets are already reeling from low earnings and some in the industry say that things might get bad for both retailers and consumers before it gets better.

The Commerce Department reported last week that retail sales fell 1.8 percent from October. Vehicle sales tumbled 2.8 percent.

One sign of the times is that Wal-Mart—one place that St. Clair residents can usually go to find a good price for their needs—is flying high while other outlets across the country are left on the runway.

Another is that a recent Fitch Retail Credit Card Index showed that 60-day delinquencies on balances increased by nearly 24 percent since August to 4.8 percent. Debts deemed uncollectible are expected to exceed 12 percent in the first half of 2009, up from current levels of about nine percent.

Dr. Bob Robicheaux Professor and Chair of the Department of Marketing and Industrial Distribution at UAB said that despite St. Clair’s growing retailing might, things might not be looking good for the end of 2008 and into 2009 for Alabama retailers.

He said that one difference in looking at national to state retailing woes would be comparing being in a “SLUMP” to being in a “slump”. Though that might sound bleak, he said that this area should fair much better than the rest of the state, while the state should fair better than national averages.

Since 70 percent of America’s economy is based on consumer spending, if the retailing ship sinks, then the economic fleet will have already been lost.

What led to the national retailers feeling the pinch has been a snowball effect stemming from the failing housing market and the bank bailouts of 2008 coupled with the looming Big Three auto bailout that some view as a Band-Aid on a large sore that could result in a large portion of the economy hurting for a long time.

Robicheaux said that during this holiday season consumer confidence is at an all time low and the main reason for that is the country being in a transition from a lame duck presidency and people waiting to see if strong action will be taken to fix the financial problems in America with the incoming Barack Obama administration.

“It may happen in January through March, or it may not. It’s kind of the worst of all circumstances to have troubling economic circumstances, challenging economic problems and nobody really in a position to take decisive action,” Robicheaux said.

When times are good, retailers prosper; and when times are bad, retailers suffer. But consumers should not throw out the baby with the bathwater, especially in St. Clair County.

One of the ways to get a better bang for your buck that many consumer experts are suggesting would be to do a bit of haggling for big-ticket items.

“Consumers across the board, all across the country, in Alabama and in St. Clair County can count on retailers doing everything they can to sell the merchandise in their stores even if they have to sell it at a slight loss,” Robicheaux said. “They need to sell that merchandise and get it out of the store. Having coats hanging up for sale in March and April is not going to do them any good. What consumers need to do when they go into the store is realize that and if they don’t like the price, make an offer.”

An example would be that a shopper might go into a store wanting to buy a new suit. If a retailer offers a 40 percent discount and that suit is still out of reach, then ask that they throw in a shirt and a tie to seal the deal.

“There’s nothing wrong with bargaining,” Robicheaux said. “Americans simply have forgotten how to negotiate. Some people think, ‘Oh, I feel uncomfortable about asking for a better deal.’ But commerce was made to be negotiated and that’s the normal way of doing things in business-to-business dealing. People come in and they ask for a price and if they don’t get it, they ask for a better price and they negotiate and compromise. Haggling is not bad, it’s just something that Americans don’t feel comfortable doing because they’ve never had to do it and they just pay a little bit more and forget about it. Now is the time. The retailers need to sell their items. A jeweler doesn’t need to do that. Their items will be as good in three months as they are today. But a merchant has got to take whatever merchandise they have and convert it to cash they can get and try again in the Spring.”

Robicheaux said that in the grand retail scheme of things, problems are not as bleak as some have predicted, but added that there are serious problems that need to be addressed in the coming year.

In a perfect world one way to get out of the current financial situation would be to wipe out all of the financial blunders made in the past few years. Since that isn’t an option, then when the Barack Obama administration comes into office, their priority No. 1 will most likely be to get the ball rolling to stimulate the economy.

“We have to ask ourselves, ‘What stimulates an economy and what gives people confidence?’ The number one thing is that you have to make sure that people can afford to buy things without fear and without fear of losing their jobs,” Robicheaux said.

History has shown that one of the ways to ensure that is to provide incentives to businesses to hire people and not fire them, provide tax incentives and lower the tax rates for consumers so that they have more money to spend on things they want to buy.

“We’ve shown in the past 25 or 30 years that every tax cut has led to an increase in prosperity and a reduction in unemployment and an increase in consumer confidence and spending,” Robicheaux said.

With people in the country being told that the American auto industry is on the brink of financial collapse and that tens of thousands may be laid off as a result; the American consumer economy has hit the brakes for now.

There isn’t a real secure sense of what the future holds and Americans will have to see if the promises made by the U.S. Congress to the Big Three automakers will be kept by the incoming administration.

The last time the U.S. faced an economy as weak as the current problems was in the late 1970s during the Jimmy Carter presidency when there was a record 12 to 13 percent unemployment and double-digit inflation of around 12 percent.

Fast forwarding to six months from now and all of the problems with the economy land square in the lap of the incoming Obama administration. How they deal with the widening issues will be the keystone of how the national retailers fair and the economy as a whole.