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Can shoppers bail out the economy?

Lined up at 2:45 a.m., Mary Kline was 16th in the door at Toys "R" Us.

Four hours later — including 45 minutes in the serpentine checkout aisle — she emerged pushing a shopping cart overflowing with toys for nine kids in her extended family.

"I'm 75 percent done shopping and got most of it at half price," said the St. Petersburg mother of three. "We're holding the line on spending this year by agreeing the adults won't exchange gifts."

That was the common refrain in the predawn chill of Black Friday, the traditional start of the annual holiday shopping season. Stores ladled out deeper discounts than usual to get people in a holiday spending mood. The crowds were thinner, and shoppers were motivated by bargains and stuck to the budget.

Michael Deremer and his wife July were at Kohl's at 4 a.m. but left empty-handed after a shopper ran into him with a cart. So they lined up at Best Buy at 4:30 a.m. to see about a GPS or a laptop for their son, a Marine stationed in San Diego.

"We're not going to spend as much this year," said the Seminole plumber, who added that his business dropped by half this fall. "It's bad out there."

Retailers, who hope to get a lift from lower gas prices and a week of rising stock market prices, know they have 26 days to woo adults into spending again to salvage what's predicted to be a dismal holiday.

Stores already had low expectations before the stock market collapse, relentless layoffs and the banking crisis sent scared spenders back into their shells. Now even stores' thinned-back inventory may be too much to unload without deep discounts.

There's a lot on the line. Consumer spending is two-thirds of the economy, so any recovery hinges on the revived spending. Jewelers, toy stores, apparel chains, bookstores and department stores all earn up to a third of their sales and half their profits for the full year in the last two months of the year. And many chains have already started belt-tightening — hiring fewer seasonal workers and trimming full-time staff — in anticipation of a deep recession. Earlier this week Dillard's Inc. laid off 500 full-time employees including 60 at headquarters in Little Rock.

The National Retail Federation chose not to update its September forecast of a modest 2.2 percent gain to $470-billion in holiday general merchandise sales, which was made before the bank or stock market meltdown. Adjusted for inflation, however, even that weak gain would be a sales decline. Some economists and analysts predict a decline as deep as 5 percent without inflation.

Still, Tampa Bay malls and retail districts were jammed on Friday. By noon, parking spaces were particularly scarce at Westfield Countryside, local Wal-Marts, Burlington Coat Factory and International Plaza.

"So far so good," said a cautious Gary Malfroid, International Plaza general manager.

Stores went all out with one-day sales, special buy promotions like Wal-Mart's 32-inch HD TV sets at $388, a $599 HP desktop computer at Best Buy and $10 sweaters and $7.50 hoodies at Old Navy.

Stores offered all manor of come-ons: buy one get one free deals, spend $50 today and get a voucher for half price on a $50 purchase in two weeks. The $19.99 deal for jeans at Anchor Blue didn't look bad, except Charlotte Russe next door advertised jeans at $14.99.

Others added value to prod spenders to see a deal: Victoria's Secret handed out flashy tote bags with every $60 purchase, and International Plaza passed out 1,000 sport handbags and will have free gift wrapping until Christmas Eve in the food court.

Marcos Avellan, Sears store manager at Tyrone Square, had a PDA, cell phone and walkie-talkie hanging from the back of his belt and rolled up copies of the employee work schedule and Sears newspaper ad circular tucked in around his waist to field questions.

"I'm sorry, sir, but all the Blue Ray DVD players priced under $200 are sold out," he explained to one customer, then turned to another, "If you want the $600 Kenmore high efficiency washer and dryer set, you can get in either this line or that line."

Even Saks Fifth Avenue and Nieman Marcus slashed prices. Saks took half-off fall goods that had not already sold at 40 percent off. Neiman Marcus kicked off a big clearance sale featuring Dolce & Gabana jeans at $537 that once went for $895, Marc Jacobs pants marked down from $280 to $160 and a Diane von Furstenberg skirt for $180, down from $275.

Toy and electronics stores don't have the luxury of any new, hot must-have items this year. Among the expected top sellers are digital picture frames, cheaper GPS units and a glut of HD TV sets as weak demand presses prices lower.

The new World of Warcraft game, which debuted at a video game sales record of $96-million in 24 hours on Nov. 13, proved that role-playing avatar games are not yet considered good presents except for kids.

"Warcraft died down right after the launch," said Tyson Brown, who manages Game Stop in St. Petersburg. "But other games like Call of Duty and Gears of War for Xbox 360 are selling great at buy two, get three."

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

Can shoppers bail out the economy? 11/28/08 [Last modified: Monday, December 1, 2008 1:34pm]
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