Holiday 2007: 4 red flags

Housing, credit market turbulence, product recalls and declining store traffic are threats that could trip retailers’ sales and profits in the coming months and beyond…

Store traffic declining: Shopping trips to malls have declined for 6 of the past 7 months months, according to Chicago-based market research firm ShopperTrak RCT.

“It’s the first time that we’ve seen traffic fall across the United States and we’re alarmed by this continuous drop,” said Bill Martin, CEO of ShopperTrak, which monitors traffic and sales at close to 50,000 retail locations nationwide.

Wal-Mart, the world’s largest retailer, said consumer traffic to its stores last quarter was softer than expected. Gap Inc., the No. 1 clothing chain also complained of weaker traffic trends last quarter.

Americans say they are making fewer trips to stores to save on gas, ShopperTrak’s Martin said. They’re also buying more online and bulk shopping at wholesale clubs like Costco and Sam’s Club.

CNNMoney.com