Americans struggling to pay their mortgages or put food on their tables are likely to cut back on their gift-buying this holiday season.
But the tight economy might actually work in some shoppers' favor as retailers slash prices -- offering bigger and earlier sales this year -- to lure customers away from their dollars.
Shoppers just need to look carefully for the best deals and play a game a chicken with retailers -- holding out for the best price, but not waiting too long for the risk of facing empty shelves.
Marshal Cohen, chief retail industry analyst for NPD Group, said that consumers feel obligated to buy gifts for some folks on their list, but he generally is calling this a "ho hum holiday."
The pain will be felt everywhere, from high-end stores to discounters.
"No level of retailer is insulated from this downturn," Cohen said.
"Consumers will be keeping careful watch on their credit card spending this season," Cohen added. "I think many will refrain from purchasing an indulgence or splurge gift, and for the first time in years, may actually cut people from their shopping lists."
Plenty of retailers will be offering sales well before Black Friday, the day after Thanksgiving when the Christmas shopping season traditionally starts.
"For consumers, it's good news. They can get anything, anywhere at any price," Cohen said. "Consumers can ask for additional discounts."
Lori Wachs, a retail analyst with Delaware Investments, said that she is already seeing some retailers, including big names like Sacks and Macy's, offer big sales.
"You just never see that kind of stuff in October. You really never see promotions, on a small scale, starting to happen until November," she said.
Wachs predicts there will be "deals to be had across the board."
"I don't think I'm unique is sensing that it's going to be a very difficult holiday season with promotional levels like we haven't seen in a long time," she said.
Even before the shopping season starts, there is new bad news for retailers.
Electronics retailer Circuit City is considering closing at least 150 stores and firing thousands of people to avoid bankruptcy, The Wall Street Journal reported Monday.
Most retailers thought they were being very conservative when they placed orders for the fall last spring, Wachs said, but they had no idea about how bad the economy would be.
"They all have been pretty upfront by saying: we thought we had our inventories lean enough, we did not," Wachs said.
One bright side, she said, is lower gas prices. Lower-income shoppers, for the most part, don't have money in the stock market and have been hurt more than others by this summer's high gas prices. Now that prices are abating, they and teenagers might be more likely to spend extra cash on gifts.
U.S. consumers plan to spend an average of $832.36 on holiday-related shopping this year, according to the National Retail Federation. That's up, in the trade group's words, "a paltry 1.9 percent over last year's" planned spending. That's the lowest increase since the survey started in 2002.
One area of cutbacks: gifts to family members. Expect either slightly cheaper gifts or no gifts for more distant relatives.