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With related story on how small stores try to keep customers away from big chains

The give-and-take between retailers and shoppers can be most appreciated — and exploited — during the holiday shopping season.

Retailers discount their merchandise just enough so that shoppers will rush to buy, resulting in hefty profits for businesses. Shoppers scour the circulars, go online or wake up early on Black Friday, and in the end, spend their money believing they got a great deal.

But this is no ordinary holiday shopping season. Retailers and shoppers will have to try harder to maximize profits in a time when unemployment continues to worsen and households have become wary of increasing credit card debt.

Retail consultant Doug Fleener compares their relationship to a high-stakes “game of chicken,” in which one player expects the other to yield to its demands: Retailers want shoppers to spend more, while shoppers want retailers to discount more.

“And neither side wants to lose,” said Fleener, president of Dynamic Experiences Group in Lexington, Mass.

He added that retailers are being cautious this season after being stung a year ago, when holiday sales dropped 3.8 percent from 2007. The retailers’ biggest strategy, he said, is to keep a smaller stockpile of inventory and make an effort to sell all of their product.

“You’d rather miss a few potential sales at the end and maintain some profit margin than have to give it all away because you didn’t sell enough,” Fleener said.

Last year’s abundance of merchandise forced stores to mark down their prices at the end of the season just to get goods off the shelves. But consumers shouldn’t assume that will happen again before this Christmas.

“Even if the deals are there, what the consumer wants may not be,” Fleener said. “If you see it, you better grab it.”

That is already the case with some of the season’s most popular toys. Some shoppers at the Toys ‘R’ Us in Mays Landing tried earlier this month to purchase Zhu Zhu Pets — robotic pet hamsters with names such as Pipsqueak and Numnums — but found the store was sold out.

“Holiday shoppers have a better chance of finding must-have toys, like Zhu Zhu Pets, at Toys ‘R’ Us than anywhere else,” Adrienne Giordano, a Toys ‘R’ Us spokeswoman, wrote in an e-mail. “Because we’re a specialty toy retailer, we have shipments of these hot products coming into our stores daily.”

The Toys ‘R’ Us Web site listed the toy as being “out of stock” as of last week.

Shoppers will still find other deals: The retailer is selling more than 6,000 products for less than $10. And other nationwide retailers have been offering a barrage of “doorbuster” savings this month in advance of Black Friday, the day after Thanksgiving when they typically put forth their best promotions.

Carol Kaufman-Scarborough, a retail and marketing professor at Rutgers University in Camden, said that retailers will eventually need to wean consumers off of the heavy price cutting.

“Discounting to such an extent to sell a lot, but not really earning the profit, is an unwise strategy,” Kaufman-Scarborough said.

To keep consumers in stores, she said, businesses should think about other alternatives, such as free samples or offering secondary entertainment.

Many Best Buy stores, for instance, set up Guitar Hero or Rock Band for video game enthusiasts to play.

“People want to spend time looking without chasing the kids all over the place,” Kaufman-Scarborough said. “If you set up a room full of Wiis, I don’t have to pay for child care, and I can really look at the merchandise for a change. The store has added value and I’ll go back.”

Corey Nichols, of Vineland, said the video game stations also let players preview games they might want to buy.

Taking a break from trying a basketball game last week at the Mays Landing Best Buy — and from his active duty in the National Guard — he said his favorite video game is DJ Hero, another rock music competition.

“When I was in Pensacola, Fla., I tried it out at the Best Buy store there before buying it,” Nichols said.

But such shoppers aren’t expected to spend as much on holiday gifts as they did last year. Consulting firm Deloitte LLP surveyed 10,000 adults, and found the average consumer will spend $452 this year, down from $532 in 2008 and $569 in 2007.

To save money, Kaufman-Scarborough suggests shopping online, where merchants post additional coupons and deals on their Web sites.

Certain sites aggregate information from major retailers and compare prices and other information. Freeshipping.org, for instance, compiles the free shipping offers of hundreds of retailers and their expiration dates. Meanwhile, Dealtaker.com has started posting Black Friday ads for big-box stores such as Best Buy, Kohl’s and Macy’s.

In addition to going online, shoppers can try setting up a budget and sticking to it.

That is Erin Langley’s strategy. The grandmother from Maurice River Township spent about $300 last year on her three young grandchildren and plans not to go over that amount again.

“You stick to your list,” Langley said recently, as she and her daughter, Raven Eberhart, of Strasburg, Va., rummaged through an aisle of Fisher Price baby dolls at Toys ‘R’ Us.

Susan Cincotti, of Egg Harbor Township, said her strategy involves shopping early, and not necessarily waiting until Black Friday for the best deals. After having her hours cut back at Bally’s Atlantic City, where she is a server, she is able to spend more time comparing prices at various stores.

In the clearance section of Toys ‘R’ Us, she realized the Big Lots she was shopping at before had better sales. Last year she and her husband spent about $500 on each of her three daughters, ages 8, 11 and 13, but this year she plans to spend $300.

“What they want is an iPod, but what they’re going to get is (a less expensive) MP3 player,” Cincotti said. “The trick is to spend our money so it looks like we got just as many gifts as last year.”

Contact Erik Ortiz:

609-272-7253

EOrtiz@pressofac.com

More Coverage

• Black Friday shoppers hunt for deals

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