Santa will be thinner this year, a sign that he cannot afford all that rich food. It is a good thing that he wears a beard because can’t afford a razor.

By most estimates, this will be the worst holiday shopping season since 1991. That is optimistic. The better benchmark is probably the deep recession of 1973.

Some retailers may not have access to the credit needed to keep items in inventory. It won’t matter much to them if shoppers show up or not. They won’t have anything to sell.

According to The Wall Street Journal, "When they report September sales this week, many retail chains are expected to show big drops in sales at stores open at least year." For operators including JP Penney (JCP) and Gap (GPS), sales could drop by double digits.

Retailing may be a case of where recession begets recession. Temporary employees hired to staff stores for heavy holiday shopping may not be needed. Some full-time workers could be pushed out, adding to unemployment numbers.

While the average store may post a heavy downturn in sales, it could eventually have a perverse benefit for the retail industry. Several of the weakest retailers including Sears (SHLD) and Macy’s (M) certainly have too many stores. A pruning of operations would actually create smaller and more profitable companies. Some retail companies may fail altogether, but whatever is left of their customer bases will further strengthen the corporations which stay in business.

The bad holiday will over time be good for the best companies in the retail industry.

Douglas A. McIntyre

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