Retailers pin hopes on cautious shoppers

The Friday after Thanksgiving usually finds shoppers lined up at 4 a.m. outside some department store.

This year, they may sleep in.

Although gas prices have dropped to about $2 a gallon, and the Triangle as a whole may be doing OK, people are still worried.

And worried people don't splurge.

"People have made the decision, 'Well, I'm not spending more,' " said Robert Passikoff, president of Brand Keys, a New York firm that follows consumer spending.

"This year, they do mean it."

Already, the normally robust retail industry is reeling, with several large chains declaring bankruptcy.

A further slowdown would cause more problems for retailers and the national economy, which relies on consumer spending for two-thirds of its activity.

Last year, holiday spending topped $460 billion. If substantially less is spent this year, more stores will close, fewer jobs will be available, and there could be more bankruptcies.

Want a silver lining in all that gloom and doom?

If you have money to spend, it should be a great year for bargains.

With less than two weeks to Black Friday, here are a few things you can expect.

THE HIRING: With lower sales expected and less cash in the coffers, retailers aren't hiring as many seasonal workers as in the past.

This year, October hiring nationally was 19 percent lower than in 2007, according to Chicago research firm Challenger, Gray & Christmas.

Local Employment Security Commission offices do have some holiday employee requests from retailers such as TJMaxx, as well as UPS and the U.S. Postal Service, said commission spokesman Larry Parker. But demand is down.

"We kind of think that retailers might be a little more reactive rather than proactive this year," Parker said. "They hired just a few people rather than a dozen, and they're going to wait and see."

For shoppers, fewer workers could mean longer waits and less customer service.

THE SALES: Most years, retailers start holiday sales immediately after Halloween. So it only seems that they started earlier this year.

What is new: The big sales started earlier.

For instance, Kmart has been running a few deals each week since Halloween at special "Black Friday Prices."

We also are seeing earlier "free shipping" promotions from online retailers. Also, the "spend money, get a gift card" trend of the past few years continues. An example: Spend $50 at L.L. Bean and get a $10 gift card.

THE PITCHES: The normal bombardment of holiday advertising has started, and this year the messages appeal to our emotions and acknowledge our tight budgets.

J.C. Penney is urging you to "Feel the joy of giving."

Kohl's is advertising "gifts that fit your budget beautifully."

Ann Taylor is promoting the fact that two-thirds of its clothes are now machine-washable and don't require pricey dry cleaning.

"People are coming into the store with their wallet shut tight," said Candace Corlett, retail analyst with New York's WSL Strategic Retail. "You're really going to have to ... make them feel good to make them open it up."

THE PREDICTIONS: Most analysts expect retail sales to be down from 2007. Some predict a drop of as much as 5 percent.

Some, including the National Retail Federation, are predicting a slight increase in sales, but a smaller one than in past years. The retailers group said the increase will be about 2.2 percent.

Who is right won't be known until January, when most retailers release their fourth-quarter results.

But the signs are not promising.

October retail sales, released Friday by the U.S. Commerce Department, showed that seasonally adjusted sales decreased 2.8 percent from September.

"Consumers went into hibernation in October while concerns about the economy were at a peak," said Rosalind Wells, chief economist for the retailers group. "As economic uncertainty went from bad to worse, shoppers pulled back on everything but the basics."