Specialty retailers are seeing total ticket sales hold steady – when the shopper is in the store.

"Consumers are spending about the same amount when they go to the store. But they're visiting the store less often. We're seeing double-digit declines," said David Kuntz, associate director - specialty apparel. "We also see the Wal-Mart effect as people are trading down."

On the discount side, Wal-Mart's focus on remodels should help sales and the chain should do better than Target.

"But Dollar General should outperform both, largely due to its turnaround plan," said Diane Shand, director of department stores, discounters & supermarkets.

The recent proposal by Target shareholder Pershing Capital to spin off its land into a REIT would impact the chain's rating, Shand said, likely with a multiple-notch downgrade. The spinoff would place it at a competitive disadvantage to Wal-Mart, which owns its property.

"Target would be incurring debt and getting nothing for it," Shand said. "If the REIT were highly leveraged, Target would to bail out the REIT if it were to get into trouble."Ironically, the economic slowdown in auto sales could help the auto chains sector, as people hold on to older cars that require parts and maintenance. The key here is the number of miles driven, which has dropped 3.5% this year (including a 5.5% drop in August, when gas prices peaked).

Consumers are spending less on their homes, affecting home improvement chains. All but the most necessary repairs are being postponed.

And don't expect a department store recovery anytime soon. Comp-store sales should be negative for the rest of this year and into next, Shand said.

"Consumers are really reining in spending," she said. "They feel pretty poor."

But they all need to eat, she added, so national supermarket chains are holding up well. Even a shift by consumers to private label goods, which hurts overall sales figures, helps margins, she noted.

Another key will be differentiation, Hirschberg said. It is clear that the United States is overstored, and thus market share is increasingly difficult to get.

"While I walk into Staples, Office Depot and Office Max, they all look the same," Hirschberg said. "It's the same for department stores. The key is to look different."