The stars are aligning for a very Grinchy holiday season with six days cut from the shopping season, an earlier Hannukah, teens and millennials who won't shop for apparel, and consumers spending on cars and homes. Retailers generally expect to make close to 40% of annual sales in the holiday season. But this Black Friday may be very black indeed, especially after a weak back-to-school showing.

The consumer as Scrooge
Consumers surveyed by the National Retail Federation said they would be spending 2% less this holiday season, with a budget of $737.95 for gifts, down from $752.24 in 2012. This looks in line with predictions by Shopper Trak, which sees holiday retail sales up 2.4% (less than the 2012 sales increase of 3%) but actual traffic down 1.4%.

Consumers told the NPD Group in September (predating the government shutdown) that they would buy as much or more this year. NPD analyst Marshal Cohen said

"This year's holiday will be a tricky one for retailers. With fewer days between Thanksgiving and Christmas, government distractions, and lack of newness in the marketplace, retailers will have to rely more on promotions to excite the consumer."

J.P. Morgan analyst Brian Tunick told Bloomberg that the retail shopper just won't buy full price. The same 6,000 consumers in the National Retail Federation survey echoed this statement, with 36% saying sales and discounts would drive their purchasing decisions. Fully 40% said they planned to shop online, the highest percentage ever.

After a weak Back to School retail showing, Black Friday looms ever larger as the chance to catch up. Macy's (M -2.68%) told a grim story on the second quarter call, taking down guidance for the entire second half of the year. The company predicted full year comparable same store sales growth would be an anemic 2%-2.9%, below the previously-guided 3.5%. The company's gross margin contracted to 41.8%, which was down 10 basis points from the year ago quarter.

Macy's is really scrambling, as CEO Terry Lundgren said the company wouldn't be able to make up this quarter's shortfall with sales in the back half of the year. Macy's is bringing in workers on Thanksgiving evening, what's now called Brown Thursday. It's also hiring 83,000 seasonal workers.

Online redemption
Black Friday deal websites, updated daily, are already running full throttle alerting readers about the six week countdown. One Black Friday site with 10 years of experience predicted more Thursday openings, fewer doorbuster deals, fewer gotta have it items, less in-stock inventory, many more online sales, and retailers using social media to hawk their sales.

(KSS 1.49%)

(KSS 1.49%)

Cheaper bricks
Macy's reported particular second quarter weakness in women's and junior apparel. The weakness in Juniors, CFO Karen Hoguet admitted, may not turn around until spring 2014. It seems that Kohl's is gaining share in that area, as Prosper Insight and Analytics found in a survey. Close to 40% of Macy's female shoppers left Macy's to then buy apparel at Kohl's and J.C. Penney, taking advantage of Kohl's lower prices and increased promotions.

Kohl's may be the comeback kid this year. The company is hiring over 50,000 holiday associates, and the extra 1,000 temps, over last year's 53,000, that it's hiring are going to its distribution centers. Kohl's will have three new stores operating and should finish the renovation of 30 stores by Black Friday. The new and renovated stores will also feature free Wi-Fi.

The last two months of the year are the strongest for Kohl's historically. With extra associates and more promotions than Macy's, Kohl's should do well even in a challenging holiday season.

The nitty-gritty
Amazon's forward earnings multiple is huge at 110.49. Its negative net profit margin of -0.20% means that although each employee brings in revenue of $756,199, net income per employee is only -$1,143. That said, it will likely dominate holiday e-tail, as it has for years.

Macy's looks much better after the New Year because it already lowered guidance. Kohl's bargain seekers will help Kohl's steal share from Macy's this holiday season. Macy's and Kohl's are similar on valuation and yield, Macy's at a 12.42 P/E and Kohl's at 12.44, with a yield of 2.70% to Macy's 2.40%. But Kohl's looks ready to compete for holiday shoppers.