Retailers hope shoppers are ready to spend

By Nicole Maestri

NEW YORK (Reuters) - Let the holiday shopping madness begin ... please? That is the silent plea coming from U.S. retailers, which are gearing up for "Black Friday", the chaotic and competitive day after Thanksgiving (November 22) when stores offer eye-popping, limited-time deals to kick off the holiday shopping season.

But this year retailers are heading into the Thanksgiving weekend on edge, worried that consumers will keep a tight hold on their purse strings in the face of a shaky economic environment and lack of must-have products.

To try to jump-start sales, many retailers rolled out holiday deals earlier than ever and Wal-Mart Stores Inc (WMT.N) cut prices on hot toys on September 30.

Despite retailers' herculean efforts to get shoppers into stores early, with less than one week to go until Thanksgiving signs are emerging that consumers are hesitant to shop.

Undeterred, retailers have more tricks up their sleeves, hoping they will finally be able to convince consumers that Thanksgiving is time to get their holiday shopping underway.

Some retailers, including Wal-Mart and Circuit City Stores Inc CC.N, will offer special deals on their Web sites on Thanksgiving day, while others will open at midnight Thanksgiving night to jump-start the weekend madness.

"Retailers understand that store traffic is likely to be down this holiday compared with prior years and that they have to pull out all the stops to make sure that limited traffic is coming to their stores instead of others," said Frank Badillo, senior economist for the consulting firm TNS Retail Forward.

GETTING THE HOLIDAY RUSH GOING

Retailers count on the Christmas season to ring up 25 percent to 40 percent of their annual sales, but this year holiday sales are forecast to rise at their slowest pace in five years, according to the National Retail Federation.

Mall traffic has been on the decline, and ShopperTrak, which measures customer traffic primarily in malls, expects a 2.5 percent drop in overall foot traffic for the holidays.

In the past week, department store operators J.C. Penney Co Inc (JCP.N) and Kohl's (KSS.N) reported lower third-quarter profits and cut their earnings outlook for the holiday season.

Penney said sales weakened "dramatically" in September and October as shoppers pulled back due to the weak housing market, mortgage and credit market concerns, and rising fuel prices.

That has Penney facing a glut of unsold goods, meaning shoppers will find more items marked down in its stores.

Discounts should be plentiful this holiday as retailers try to drum up excitement amid a dearth of many new products.

"The 'It' items this year are not handbags but iPhones and Wii's," said Craig Johnson, president of Customer Growth Partners, referring to Apple Inc's (AAPL.O) new iPhone and Nintendo Co Ltd's (7974.OS) Wii video game console.