BusinessWeek ran a screen of Retail Stocks last week that should do well in the current environment. There are some specialty stores such as Best Buy and Home Depot but the list also has Wal-Mart. I think Wal-Mart will do well in the current environment but I would think a store like Target would do better when we have an actual recovery in the economy. I will wait until after the holiday season to see how the retailers fare. The Retailers Poised to Survive, Then Thrive

The holiday shopping season is forecast to be weak, but S&P retail analysts see growth potential for a number of companies despite the tough times.

Like Santa, you've probably been making a list, checking it twice, and mostly trying to figure out how to cut back on spending—for the holidays and in your day-to-day life.

U.S. consumer confidence plunged to 38.0, a record low, in October, well below the 61.4 reading in September and the 99.5 figure seen a year ago.

"This disappointing report adds more risk to an already challenging holiday season," says David Wyss, chief economist for Standard & Poor's.

What does it all mean for the retailers, and retailing stocks? The outlook is not good.

Some Will Fall
That's not just bad news for the holiday season. According to Wyss, it means some retailers will no longer be around this time next year. He theorizes that most retailers fail in the beginning of an upturn because they cut so much during the downturn, they lose out to better-capitalized rivals when the upturn begins.

Wyss says the bottom will be the first quarter of 2009, so retailers who are likely to fail will have most likely done so, in his opinion, by the summer/fall of 2009. Some companies have already filed for bankruptcy, including Circuit City, Barbecues Galore, Bennigan's, Boscov's, Mrs. Fields, and Steve & Barry's.

We polled S&P's retail equity analysts for names for which they have a high level of confidence will survive the recession and are best positioned to eventually thrive. We found 16 retail stocks that are ranked 5 STARS (strong buy) or 4 STARS (buy):

Amazon (AMZN)
Best Buy (BBY)
Coach (COH)
Dollar Tree (DLTR)
Family Dollar Stores (FDO)
GameStop (GME)
Guess (GES)
Home Depot (HD)
J. Crew Group (JCG)
OfficeMax (OMX)
PetSmart (PETM)
Ross Stores (ROST)
Staples (SPLS)
TJX (TJX)
Urban Outfitters (URBN)
Wal-Mart (WMT)

Disclosure: The Div Guy does not own any of the companies listed in the article at the time of this post.