"The reasons cited by Kentucky retailers in our survey for a decrease in sales were the overall bad economy, the high unemployment, and the general lack of consumer confidence," he said.
The only sector of the the state's retail economy that expects an increase are groceries and the prepared food business, Gould said.
"They anticipate that, because of their relatively low cost, food gifts actually will rise this holiday season."
While state and national surveys indicate there will be a lot of places where retailers will get whacked this holiday season, there will be pockets around the country and state where sales will be good, he said.
"And these pockets likely would include Lexington and maybe even Danville where the economies are fairly diversified and thus somewhat protected from a bad national economy," he said.
Local retailers appear fairly optimistic.
"A year ago, we received mixed reviews from our downtown merchants on their Christmas sales," Julie Wagner, executive director of the Heart of Danville Main Street Program, said. "Some said sales were flat, while others said their sales were up."
But from her conversations in recent days with downtown retailers, Wagner senses that most stores will at least "hold their own" this season.
"Given the state of the economy over the last few months, I would consider it a successful sales season if sales were at least the same as a year ago with some stores even seeing some increases," she said.
Walmart expects budget-cautious shoppers
Sean Cain, manager of Danville's Walmart SuperCenter, the community's largest retailer, expects sales to be about the same as last year and "maybe even a little better."
But he also expects shoppers to be watching their budgets closely.
"Shoppers will be more cautious and conscientious," he said. "They will be looking for value and will be comparing prices."
Cain expects the electronics department to continue to be where much of the Christmas sales action occurs, along with toys.
"I'm 40 and back when I was an elementary school-age kid, toys would be at the top of my Christmas wish list," he said. "Today, these kids want iPods, video games, computers, even cell phones."
Kmart manager Julia Moore predicts sales will be better than last year.
"The big economic bomb that hit right before Christmas has somewhat eased, although unemployment is still high," she said. "I expect us to do at least as well as last year with a good chance of seeing at least a slight increase in sales."
A major reason for Moore's positive outlook is the activity in Kmart's layaway department, where items are stored for customers who are paying for them in installments.
"Our layaway department has been very busy," she said. "We have twice the amount of merchandise in layway as we had a year ago."
As in past years, the electronics and jewelry departments will be the busiest this holiday season, said Moore.
At Peebles department store in Danville Manor shopping center, manager Michelle Fletcher expects a 5-percent increase in sales over last Christmas.
"We expect to do well," she said. "I really wouldn't be surprised if we do better than 5 percent."
The main reason has to do with Goody's closing and Peebles being able to capture many of those customers.
"It's unfortunate for the people who worked at Goody's that the store was closed a few months ago," she said. "But since they closed, our business has increased significantly, and we expect that to be reflected in our Christmas sales as well."
Fletcher expects fragrances to be among the store's most popular items this holiday season.
"We will have more than we did last year, and that's a good thing because we sold out," she said.
Sears expects boost from 'black Friday' sales
Barbara Worthington, a longtime associate at Sears' Danville retail store, said Christmas sales should be at least as good as a year ago.
"We have been having a really good year, and I think that will carry over to the holiday season," she said.
Christmas sales should get a boost from the store's "black Friday" sales that are being held every Friday through Christmas, Worthington said. Prices on appliances and tools are offered at deep discounts, she said.
Downtown, Carol Senn, owner of Carol's Bridal Boutique and Gift Shop, also is optimistic.