Roll out the red discount signs and prepare the bankruptcy attorneys. The nation's retailers haven't had an October this bad in more than 35 years, and the next couple of months could be even worse than they had expected.

Sales in established chain stores fell 0.9 percent last month, the weakest performance since the International Council of Shopping Centers trade group has been keeping track.

"The October retail environment was simply awful with a high degree of uncertainty around the financial markets," said Michael P. Niemira, chief economist and director of research for the New York-based group.

As if the stock market and housing problems didn't cause enough problems, retailers had a hard time being heard last month amid the cacophony of political advertising, said C. Britt Beemer, chairman of America's Research Group, a consumer behavior research firm in Charleston, S.C.

Then there were the announcements of jobs cuts. A few hundred here, several thousand there and so on.

"That's what puts Americans into a panic mode," Mr. Beemer said. People might hope their investments bounce back and wait for housing prices to be revived, but they're really stuck without a job.

In that mode, he said, consumers buy food, gas, tires, maybe some more food. But they don't pick up a lot of sweaters, earrings, couches or expensive jewelry.

And Santa may not make it all better. Trade groups and retailers alike were reassessing their expectations for the holidays and hoping someone can find a way to reassure consumers soon.

"This is going to be the worst year in many, many years," said Anthony L. Liuzzo, a business professor at Wilkes University in Wilkes-Barre who has revised his holiday forecast down since September and now expects retail sales to be either flat or slightly below last year.

The shopping centers council is forecasting a 1 percent sales gain in November and December, a number at the low end of its earlier projections for the almost 40 chain stores the group tracks.

Seattle upscale retailer Nordstrom dropped third quarter earnings projections after seeing a 15.7 percent drop in October comparable store sales. A 13 percent decline at JCPenney's established stores convinced the Plano, Texas, mid-priced retailer to lean toward the lower end of earlier earnings guidance.

Saks reported consumers have been shifting purchases to goods on sale, a trend that could cut into profit margins for the New York retailer that saw comparable store sales fall 16.6 percent last month.

"It's not very pretty," said Mr. Beemer. "It will get worse." He'd been thinking a 2 percent sales decline would be about the worst things could get. Now he's asking whether retail sales could drop further and predicting a wave of retail bankruptcies early next year.

Wal-Mart posted a 2.2 percent gain in sales at established stores as the discount giant from Bentonville, Ark., continues to benefit from its reputation as a place with inexpensive merchandise. "Highly competitive pricing, especially on basics throughout the store, is driving these results," said Eduardo Castro-Wright, the retailer's U.S. president and chief executive officer, in a prepared statement.

Proving it also knows how to use the news cycle to amplify its message, Wal-Mart yesterday announced an initiative to roll back prices weekly on various items over the next seven weeks.

Sales and discounts should be easy to find all over the retail map. South Side teen clothier American Eagle Outfitters, which posted a 12 percent decline in comparable store sales, has been getting consumers' attention with promotions and plans more when a new holiday-oriented assortment arrives in two weeks.

JCPenney's promised a robust calendar of promotional events and a message of offering "smart prices that deliver real values." Like many retailers, the company noted it has put less merchandise in its stores. Even though the chain has added 35 stores since last year's third quarter, the retailer said its overall inventory levels are down 6 percent.

No matter what promotions are offered, it may be difficult to open consumers' wallets. Mr. Beemer, whose company interviews thousands of shoppers weekly, said almost one fourth have gotten calls or letters recently informing them of adjustments to their credit card terms. A $10,000 limit might have been reduced to $7,500 or the interest rate raised.

Looking ahead, he predicted traditional day-after-Thanksgiving shopping might provide retailers with a bigger opportunity than usual this year. His research found more than 60 percent of people planning to shop that day, up from last year's 48 percent.

"If [retailers] go out there with some incredible deals on Black Friday, you can win," he said. "At least that weekend."