"Even to come close to last year's sales with this kind of market is pretty strong," Fiala said. "It's not great, but it's not as bad as it seems."

"We're still seeing around $800 of spending per family," said Joseph Feldman, managing director and senior research analyst of New York City-based Telsey Advisory Group. "So it's not like the holidays won't happen."

Other trends are troubling, Feldman. In 2001, 29 retailers and restaurant companies filed for bankruptcy. So far this year, 34 companies have filed for Chapter 11 protection, and more could come as second-tier retailer such as Borders Group, Office Depot and Talbots face challenges.

Privately held retailers will experience more weakness than their publicly held brethren, he added. And sales will continue to be sluggish into next year. Another concern for some chains: Wal-Mart's decision to remodel all of its 3,900 stores over the next few years."That puts tremendous pressure on other retailers," he said. "But if you've got the right product, it will sell."

Other trends bode well for the long term, Fiala noted. The US population continues to grow, and will exceed 400 million by 2050. Having diversified their retailer base, developers no longer are dependent on a relatively small group of department stores and national tenants to anchor and occupy centers. Overbuilding, both by developers and retailers, has been reined in as well. Retailers that had expanded their square footage by 7% annually have cut back to 4% to 4½% growth, Feldman noted.

"As an industry, we will survive, and eventually thrive," Fiala said.