The global financial crisis is taking its toll on retailers. Retail sales dropped in the US in October for the fourth straight month, the longest decline in 16 years, according to the US Department of Commerce. Market researcher Nielsen predicts that sales will remain flat or even decline during the US holiday season, from Thanksgiving in November to January 1. Sales in this period traditionally form the bulk of retailers’ annual figures. In Europe, retail sales fell for the fifth straight month in October and the outlook is grim for the festive season.

Retailers started feeling the pinch many months before the financial markets collapsed. Since late 2007, hit by weakening consumer demand, dozens of retail chains in the US have gone bankrupt and thousands of stores have shut.

Retail woes in the US are reverberating across global supply chains. According to local media reports, hundreds of factories producing clothes, toys, footwear and accessories have either closed or scaled down operations in supplier countries including China, India, Pakistan, Cambodia, Sri Lanka, Vietnam and Bangladesh, as buyers cut orders. Hundreds of thousands of workers have lost their jobs while others are seeing declines in their earnings as factories cut hours.

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