The traditional start to holiday shopping begins on Friday and runs through year's end, with the lion's share of sales occurring up to Christmas Day on December 25.
Known as "Black Friday", the day after Thanksgiving used to allow some stores to turn their profit, or move into the black, for the year.
But in 2008, U.S. retailers fear that a contracting economy and mounting job losses could cost them billions of dollars during their most crucial season of the year when they can make up to 40 percent of annual sales. Some are staying open on Thursday in hopes of capturing as much business as possible.
"Consumer spending on gifts for the holiday season is going to be down considerably," said Eric Anderson, professor of marketing at the Kellogg School of Management, Northwestern University. "Black Friday will be the first indicator of how bad it's going to be."
Experts predict this could be the worst sales season since the early 1990s as Americans hit hard by a housing slump and credit crunch make do with fewer gifts.
Based on analyst forecasts, retail sales at stores open at least a year could fall 2.2 percent for the entire month of November compared with a 4 percent rise a year ago, according to Thomson Reuters data.
Excluding expectations for growth at discounter Wal-Mart Stores Inc, one of the few companies that may prosper this season, the decline is a more precipitous 6.6 percent.
At stake is the ability for many retailers, from department stores like Macy's to specialty chains such as AnnTaylor Stores, to keep their loyal customers and eke out a profit as rivals cut prices up to 40 and 50 percent.
With times this grim, some are willing to sacrifice more profit rather than risk losing clients for good.
"It's the retailers in the middle who are trying to avoid losing customers," said Anderson. "Macy's is worried about customers who have never spent a lot of money at Wal-Mart trying out Wal-Mart and liking it."
Some consumers said they are putting a different emphasis on celebrating the holidays, focusing on time spent with family and friends rather than purchasing the latest hot toy or gadget. They may even choose to craft presents by hand or swap goods gathering dust in the attic to save money.
Others have the option of buying goods at firesale prices, after long-standing U.S. chains like Circuit City and Mervyns declared bankruptcy ahead of the holiday.
EARLY BIRDS
Several chains are launching special promotions online and staffing stores on Thanksgiving Day itself, well before the traditional roast turkey meal has had time to grow cold.
Kmart, owned by Sears Holdings, was to open its doors early on Thursday, along with movie rental chain Blockbuster, which is touting electronics gifts like Blu-ray players and game consoles this year. Toy stalwart FAO Schwarz was also due to open.
Stores from Wal-Mart to electronics retailer Best Buy to Macy's planned to open before dawn on Friday.
One silver lining could be that penny-pinching shoppers held off buying until the Thanksgiving weekend, preferring to spend what cash they have only when better deals begin to appear. That could also explain some of the sharp decline in sales for most of November leading up to Black Friday.
Nearly 45 percent of consumers plan to shop during the Black Friday weekend, according to a survey released this week by the International Council of Shopping Centers.
More than 80 percent of those shoppers expect to stop at a discount store, while 78 percent said they would head to a department store.
