Retail sales crashed 2.8% in October, exceeding market expectations and underlining the severity of this downturn.

This from Marketwatch:

Sales were quite weak across a broad swath of the retail sector in October, an indication that the fourth quarter could be worse than the just completed third quarter, when inflation-adjusted consumer spending fell at the fastest pace in 28 years. Retail sales account for about half of consumer spending and about one-third of domestic demand. Retail sales are down 4.1% in the past year. Sales fell a downwardly revised 1.3% in September. Sales in August were also revised lower to a 0.7% decline. The dismal report confirms what the business sector has been saying: Consumer spending is falling rapidly.

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Even the strongest retail brands are suffering heavy losses as consumers flock to low-cost stores. Andrew Snyder says this spells doom for Under Armour (NYSE:UA). The company has a strong marketing strategy, but its sales estimates are too optimistic for a retailer of expensive niche clothing. Andrew says the stock is overvalued right now, creating a good chance for a profitable short play.

Electronics retailer Best Buy (NYSE:BBY) slashed its full-year outlook today, saying it was “the most difficult climate we’ve ever seen.” But Paul Moore says Best Buy isn’t likely to head the same way as mismanaged Circuit City (NYSE:CC). In fact, BBY should even get a lift from the bankruptcy of its main rival just before the holiday season.