The nation's retailers face a gloomy forecast as they head into the all-important holiday sales season.
Shoppers see red -- as in crimson signs offering steep discounts on everything, for as much as 60 percent off. But even high markdowns may not be enough to lure nervous customers.
"I'm spending less this year, and I'm looking for sales … only sales," said Wanda Stevens, a mother from New York City.
Across the country, people say that they will spend a lot less on gifts this year. According to a new ABC News poll, 51 percent of Americans say they'll spend less than they did last year on gifts. It marks the sharpest drop in holiday sales in 23 years, since the 1990-91 recession.
According to Gallup poll, shoppers spent, on average, more than $900 on their holiday gifts. This year, they say they'll spend about $700.
With less cash up for grabs, stores are getting aggressive, offering holiday sales even before Thanksgiving.
"Have we ever seen sales this steep, this early? No," said Wendy Liebman, retail analyst at WSL Strategic Retail. "Retailers really just want to get people into the store."
Shoppers are in the driver's seat this season, with thousands of stores already on the brink of failure, according to the International Council of Shopping Centers.
Analysts say that a record number of retailers could be driven out of business by New Year's Day, depending upon how tightly Americans hold onto their pocketbooks.
Stores are using big discounts as bait to lure much-needed customers. At J.C. Penney, gold jewelry is 60 percent off. HDTV's at Best Buy have been reduced by as much as $500. KB Toys has already cut prices by 60 percent and other stores are following suit.
A sweater at Macy's tells the story. It originally cost $110 and was reduced to $79 last week. On Wednesday, the sweater went on sale for $49. But if you use your Macy's credit card, they'll take $25 off; so that sweater now costs $24.
But even deep discounts may not be enough to pry credit cards from skittish consumers.
"I think the sales are going to be very vibrant, very big," said Liebman. "Shoppers are smart, so smart today they know they can wait for a sale."
In an ABC News poll, 43 percent of shoppers said that they're willing to wait even until after the holidays to get what they want at the best price possible. Sixty-three percent said they would wait for sales to shop before the holidays.
Alison Stone, a mother of one who lives in Los Angeles, plans on shopping smarter this year, forgoing electronics and unnecessary gifts.
"For Christmas, we definitely want to use points to purchase things that we've accumulated with a credit card," she said. "So we're thinking ahead about how to be wiser with the holidays."
In this economy, savings trumps tradition. Many shoppers said that the wanted to preserve the holiday spirit for the kids, but would hold back on exchanging presents between adults.
"I think it will be just the children this year," Karen Charbonneau, a grandmother from Los Angeles, told ABC News. "We'll just skip the gifts for the adults. It really isn't necessary."
"We drew names this year in both families to make it easier on everybody, so we only have to buy one gift for each person in both of our families, and we've put a spending limit on that as well," said Jodi Emmerson, mother of one, with another on the way. "We're probably going to get them two, maybe three things this year, instead of 10 things."