Black Friday is just around the corner, and retail exchange traded funds (ETFs) are holding their breath.

Penni Crabtree for San Diego Union Tribune reports that distressed retailers are already rapidly discounting prices before the official startup of the holiday season in hopes of giving their near financial futures some hope. Black Friday marks the traditional beginning of the period in which retailers reach profitability for the year, or get in the black.

Holiday season sales growth is expected to be around 2.2% this year, compared to 4% previous years. As September sales have been sparse, October was horrible, and November and December have left little hope.

The flip side is that recession-weary consumers will get more bang for their buck but even if the slashed prices attract consumers the retail sector faces many challenges. It’s for this reason that Black Friday sales typically intensify during a downturn, reports Nicole Maestri for Reuters.

Teen apparel and electronics are anticipated to be the hardest hit, as there haven’t been any outstanding new advances in the industry. The so-called silver lining in the economic meltdown are the high-definition televisions, or HDTVs. This year prices for HDTVs are expected to plunge as fast as ratings for the new “Knight Rider,” says David Colker for The LA Times.

Analyst Riddhi Patel of ISupply forecasts that prices of 47-inch liquid crystal display models will go as low as $800, 42-inch plasma sets to $500 and 32-inch LCDs to $400. So, lets go shopping, and boost some retail ETFs in the meantime:

• SPDR S&P Retail (XRT), down 42.5% year-to-date

• Vanguard Consumer Discretionary (VCR), down 40% year-to-date

Tags: Retail, Sector ETFs, VCR, XRT