Retailers across the nation are slashing prices looking to get a jump on the competition for the holiday season, the Milwaukee Journal Sentinel reports.

Phil Rist, executive vice president of strategic initiatives for BIGResearch, the survey firm that measures the pulse of consumers for the National Retail Federation (NRF), is hoping things will improve after the November election.

"Now, all voters are uncertain," Rist told reporters recently. After Nov. 4, half of them -- the ones who backed the winning candidate -- will be a little happier about their futures, he said.

The NRF, the world's largest retail group, is predicting a 2.2 percent gain in sales for Christmas 2008. It would be the smallest gain since 2002, when sales increased by 1.3 percent.

Retailers aren't waiting to lure budget-conscious shoppers.

Last week, Wal-Mart Stores Inc. said it would cut prices on some of the most popular toys as it tries to jump-start the shopping season.

Other retailers already have been running weekend sales with door-buster specials. But experts say those efforts might not be enough.

Anne Brouwer, a partner at McMillan/Doolittle, a Chicago retail consulting firm, said some of the weakest retailers might not make it to Christmas, if they can't draw on their credit lines to pay vendors and employees. Many of the executives who are running retail chains now have never experienced an economy as bad as this one, and some are ill-equipped to deal with it, Brouwer said.

Manufacturers are also responding to the difficult economic times.

Mattel Inc. and Hasbro Inc. have said most of their toys will cost less than $20 this holiday-shopping season to attract cash-strapped parents.

Rosalind Wells, chief economist for the NRF, expects shoppers to be frugal in their purchases and to shy away from splurges.

George Whalin, head of Retail Management Consultants in San Marcos, Calif., believes the situation is much worse than the federation is willing to admit.

"That's baloney," Whalin said of the 2.2 percent projection. "If anybody gets to flat, they'll be glad."

A September poll of consumers by BIGResearch found that 21 percent weren't ready to say how much they plan to spend for the holidays. Of those who were thinking about holiday shopping, a majority (52 percent) said they'd spend less this year than they did in 2007. About 42 percent plan to spend the same as last year, while 6 percent expect to spend more.

The official kickoff to the Christmas shopping season is Nov. 28 this year, the day after a very late Thanksgiving. That means fewer shopping days between Thanksgiving and Christmas, which is never a good thing for retailers.

"It's the perfect storm situation," said Kohl's Corp. Chairman Larry Montgomery in a discussion with analysts.

Rist expects Black Friday, the day after Thanksgiving, to be "hyper-promotional" this year. Discounters already have started focusing their marketing on practicality, and he expects that to continue throughout the season. That's not a big change for Wal-Mart, Rist noted, but it is for Target, which has for years positioned itself as a place for chic design.

Kevin Mansell, chief executive officer at Kohl's, and Bud Bergren, chief executive officer at Bon-Ton Stores Inc., which operates Boston Store, said in interviews that the current economic climate is the worst they've ever experienced in their careers.

Both companies have reduced their inventories for the holiday season to avoid having too much merchandise and slashing prices to get rid of it.

"Everybody has gotten very cautious," Whalin said, adding that he's seen inventory reductions by many retailers in the 8 percent to 12 percent range. Kohl's is down 15 percent for the season.

"We should have less inventory because there is less demand," Mansell said.

Both Mansell and Bergren said the inventory reductions were the largest ever for their businesses, and both said the cuts were selective. Kohl's has pulled back on seasonal and fashion items, but not on basics.

Bon-Ton has about 8 percent less merchandise this year than last year, but the company is pulling back more in areas hardest hit by the economic downturn, in central Pennsylvania, Ohio and Michigan, for example, and sending merchandise to stores that are doing better, Bergren said. Sales are good in Omaha, so inventories are up by 7 percent, he said.

The smaller inventories will minimize the risk that retailers will have to resort to unplanned markdowns, which cut into profits, said Scott Krugman, vice president of industry relations for the National Retail Federation.

Even so, Whalin expects to see more bankruptcies by weak retailers who don't survive the holiday season.