Retailers face a tough holiday shopping season, Reuters reports

When Morgan Stanley issued a report in late October predicting the worst holiday shopping season since 2008, they weren't lying. Reuters confirmed Morgan Stanley's thesis on November 27 when it published an article “For U.S. stores it is ugly out there: in more ways than one.” A weaker consumer confidence index, no new “fashion must haves” and an increasingly financial responsibility mentality are all factoring in towards a very gloomy retail outlook. Many retailers including Best Buy BBY has joined its competitors Wal-Mart WMT Target TGT and others in offering Black Friday deals not only a day early, but in some cases more than a week early. Wedbush analyst Gabriella Santaniello noted that consumers are being more selective in where they spend their money forcing retailers to offer deep discounts, at the expense of their bottom line. During Best Buy's recent conference call, management offered guidance for its upcoming quarter which will be dominated by holiday shopping. “So if our competition is, in fact, more promotional in the fourth quarter, we will be too,” said the company's CFO Sharon McCollam. The executive then further explained“ and that will have a negative impact on our gross margin.” One thing remains for sure. The shopping season will be a difficult and challenging one for retailers, investors and perhaps most importantly with families at home.