Economists already predicting a lump of coal

Lynn Franco, director of the Conference Board's Consumer Research Center, said the holiday period doesn't "look too good" at the moment. "There will be a lot of heavy incentives" to get people to shop, she said.

At Starbucks Coffee Co., which has seen customers make fewer latte trips, one million customers have signed up for the company's rewards card launched in April, said Brad Stevens, vice president of customer relationship management — indicating that shoppers are looking for a good deal. He expects to enhance the card's offerings for the holidays.

Still, such incentives may not be enough to save the industry's holiday season. Despite aggressive discounting last year, same-store sales for the November-December period rose a modest 2.2 percent, the weakest holiday period growth since 2002.

Reacting to the malaise, retailers are paring back expansion plans and closing stores. J.C. Penney Co. announced Wednesday that it will now open 20 new or relocated stores in 2009, down from 36 announced in April. It had previously planned to open 50 new stores each year through 2011.

Shoppers should also expect to see more focused holiday offerings as stores cut back on inventory. Dan Hess, founder and CEO of research firm Merchant Forecast, estimates that retailers are paring back autumn orders by 15 percent from a year ago.

"I think (shoppers) are going to be way more selective than last year," said analyst Jennifer Black.

While it's too early for most shoppers to have holiday shopping budgets, some consumers are already expecting they'll be more frugal.

Zammit said she may scale back on the number of gifts she gets for her entire family, except for people like her parents.

Kara Flynn, 25, of Milwaukee, said she will probably cut back on the edible treats she bought family members from grocery chain Trader Joe's last year.

"I'm probably going to think twice about what I'm going to get them," she said.

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