Everything must go ... now

This holiday season is shaping up to be the battle of the better deal — and it's a bloody battle indeed.

For months, retailers have been throwing themselves at consumers with promotions, yet October results show such efforts aren't yielding much, with same-store sales coming out negative across retail sectors. Less than three weeks away from Black Friday — the biggest U.S. shopping day of the year — retailers are bracing themselves for what promises to be the weakest holiday season in decades.

It's a fear that's turning what once were high-end department stores into outlet-style versions of themselves and mass-market retailers into dollar stores. At Saks Fifth Avenue, where same-store sales plummeted 16.6 percent last month, a $1,030 pair of Christian Louboutin boots can be purchased for $618. At Old Navy, where sales at stores open more than a year were down 20 percent last month, winter gloves and scarves were $1 apiece last weekend.

"I have never seen any environment like this," says retail analyst Jennifer Black, who has followed the industry for nearly 30 years. "The fight is on ... They are all scared."

Department stores were hardest hit last month, with an average 12.8 percent decline in same-store sales. As a result, retailers like J.C. Penney and Nordstrom are doing anything they can to one-up their competitors for consumers' attention. And they have no shame.

At Penney's, where same-store sales fell 13 percent, "The Biggest Sale of Them All" has items marked as much as 60 percent off. At Neiman Marcus, where same-store sales plunged nearly 27 percent last month, a promotion called "First Call Sale" has new items that typically don't go on sale right away marked down as much as 40 percent the moment they hit shelves.

Nordstrom, where same-store sales were down 15.7 percent this October, is using its price-matching strategy to compete with others vying for shoppers — following suit on sales at Saks and Neiman by honoring their discounted prices. And while Nordstrom typically offers double-rewards points for five-day periods during sales, this year the double-points perk that gets customers a $20 coupon for spending $500 is lasting 69 days, until yearend. The hope is that customers will amass points and return for more.