WATERVILLE -- Retailers in central Maine, as across the country, are preparing for one of the slowest holiday shopping seasons in a decade as a staggering economy leaves residents less likely to make extra purchases.

Merchants typically use the day after Thanksgiving to spark a flurry of buying and selling, with the dollar amount of total sales increasing an average of 4.4 percent each year during the past 10 years. This year, however, the National Retail Federation predicts lesser growth -- a 2.2 percent increase from the 2007 total, finishing with a total of $470 billion in sales for the holiday season.

"Americans may be hesitant to purchase expensive gifts this holiday season, but personal and practical gifts will resonate most with shoppers this year," federation President Tracy Mullin said.

"Companies have already been featuring substantial sales and discounts, (but) retailers may still have a few tricks up their sleeves to attract and entice holiday shoppers," Mullin said.

In a series of statements, the federation pointed to a struggling housing market, rising unemployment and small income gains as factors forcing consumers to be frugal this year. Two other factors of particular interest to Mainers, given their state's cold climate and weak economy, are the continuing high prices of food and energy.

The next couple of months are crucial to sellers in Maine, Maine Merchant Association Director Curtis Picard said, "since a lot of our retailers really depend on this holiday sale period to determine whether they'll have a profit." Shrewd planning could shield area businesses from the worst losses, however, he said.

"At the end of the day," Picard said, "if overall sales growth is expected, and retailers have taken appropriate steps to minimize excess inventory, then they could still be OK."

Retailers in the Waterville and Augusta areas reported varying degrees of confidence in how well their strategies would carry them through what could be a difficult holiday shopping season.

Phil Judd, owner of The Painted Horse toy store in Augusta, said he had cut back on his inventory in anticipation of slower sales.

"We're looking at a very slow season," Judd said. "We certainly are experiencing concerns behind sales right now. I don't know if people are delaying shopping or cutting back."

Judd said he hopes the quality of the toys offered in his store will entice holiday shoppers.

In Waterville, Sign of the Sun owner Frederick Ruder expressed confidence that the niche he has carved will insulate his store from tough economic times.

"We're actually in good shape," Ruder said. "The people who appreciate interesting, as opposed to inexpensive, items ... they just appreciate" his store's offerings.

Ruder said he does a lot of "beachcombing" to find the right products to include in his store, which features an eclectic mix of clothing, jewelry and housewares.

In Hallowell, a manager at Paper Kicks, a novelty-cards and gifts shop, expressed some trepidation about sales. The owner reduced the normal volume of purchases when stocking the inventory this time around, manager Dale Smith said.

"I think overall this year sales have been down somewhat," Smith said. "I think everybody is fearing the worst, but we're just going to wait and keep the faith."

Joel Elliott -- 861-9252

jelliott@centralmaine.com