Stores hope earlier sales can beat penny-pinching

By SANDRA PEDICINI

ORLANDO, Fla. — For retailers and holiday shoppers alike, this is a season of lowered expectations.

With memories of last year’s tough Christmas still fresh in their minds, merchants are again slashing prices and cutting inventory in 2009. Some nervous retailers aren’t waiting for the day after Thanksgiving to offer their best deals.

The recession, high unemployment and a lack of “must-have” gifts have many experts predicting yet another drop in holiday spending.

“I don’t see anything out there that tells me the consumer is going to spend any more money this year,” said Britt Beemer, Orlando, Fla.-based chairman of retail-polling firm America’s Research Group.

Even the National Retail Federation, usually optimistic in its predictions, expects a 1 percent decline in total U.S. holiday sales compared with last year, to $437.6 billion.

Last year, the federation predicted a 2.2 percent increase in spending. Instead, retailers suffered a 3.4 percent drop.

Some chains — Circuit City and KB Toys among them — shuttered all their stores shortly after the Christmas decorations got packed away. And those left standing need to squeeze every dollar they can out of anxious consumers such as Tracey Kron of Orlando, who plans to stop buying gifts for her friends’ children. She also plans to have her own two children make gifts for relatives rather than buy them.

With less disposable income now that her daughter has started preschool, “we’re trying to kind of budget with the future ahead, so we’re not just throwing it all on the holiday.”

Ana Nazarian of Orlando, a mother of two who’s a church accountant, will use a variety of cost-saving strategies. She plans to comparison shop on the Internet; fight the crowds on Black Friday, the day after Thanksgiving that’s traditionally one of the busiest shopping days of the year; and “definitely look for the sales.”

It doesn’t help that there doesn’t appear to be any new hot items to capture consumers’ attention, said Marshal Cohen, an analyst with the NPD Group, a market-research firm.

“There’s plenty of nothing that you want to go around this year,” Cohen said.

At Orlando Fashion Square mall, marketing director Dave Ackerman expects shoppers to focus on basics. Parents, for example, likely will buy clothes for their kids after spending cautiously during back-to-school season, he said.

“It may not be a great holiday for real discretionary items, but you’re still going to see people who’ve got a lot of needs who are going to be rolling those things into the holiday giving,” he said.

The retail industry’s struggles have hit Orlando Fashion Square particularly hard. The mall lost more than a dozen tenants during the past year. This year, it is launching something new to get shoppers spending: a chance to win $25,000 for those who spend at least $75 on any one day from Black Friday through Dec. 13.

Department-store chains also have tried new promotions, and many of them have started advertising deals early.

“It’s been a real race to get the customers into your stores to shop,” said Mike Gatti, executive director of the Retail Advertising and Marketing Association. With retailers everywhere having cut prices dramatically, “the only thing left is to compete to get them into your stores early.”

Sears started weekly “Black Friday Now” sales on Halloween.

Kmart, owned by Sears Holding Corp., has pre-Black Friday deals going on this month. The chain also has resurrected blue-light specials this year and has expanded its layaway program, now allowing shoppers to use it online. And Kmart launched a Christmas club card in August.

Customers paid for the cards ahead of time and added money to them, similar to a gift card, to spend around the holidays.

Discounters have an edge this season. The National Retail Federation expects about 70 percent of shoppers to buy there.