At Westfield Garden State Plaza in Paramus last weekend, Karen Sultan was looking for back-to-school bargains.

"I'm definitely buying less this year because everything is so expensive," said Sultan, a Rockville, Md., mother of three who was shopping with her mother, Ruth Swinney of Leonia.

She's not the only shopper who feels that way. Surveys by various retail watchers are reporting large segments of the shopping population are planning to reduce spending this year due to high gas prices and economic uncertainty.

A survey by consulting firm Deloitte LLP found that 71 percent of shoppers said they plan to spend less for back-to-school items this year. Among those surveyed, 48 percent said they will cut their back- to-school spending by more than $100.

Purchases during the July-through-September back-to-school season may grow at the slowest pace since 2001, rising 1 percent to $38.5 billion, according to the International Council of Shopping Centers in New York.

Another factor hitting consumers' wallets is inflation in China, where a quarter of all the clothes sold in the U.S. are made. China's producer price index surged 8.8 percent in June, the biggest increase since at least 1999.

Retailers are responding to pessimistic spending predictions by ramping up the competition for America's back-to-school dollars. Staples is trying to lure cash-strapped shoppers with 5-cent notebooks and free two-pocket folders. Office Depot is selling rulers and pencil boxes for a penny. J.C. Penney and Kohl's began marking down back-to-school merchandise in July.

"There's going to be very few winners when it's done," said C. Britt Beemer, chairman of America's Research Group, who is predicting back-to-school sales will fall by 1.5 percent to 2 percent this year compared with 2007. "I think retailers are going to have to mark down early to get the shoppers they want in the door."

Major revenue source

Back-to-school shopping is the second-largest revenue producer for the nation's retailers, after Christmas shopping. Weak back-to- school spending usually is a warning sign Christmas results will be less than merry for merchants.

The back-to-school shopping season is a key time of year for a number of New Jersey-based retailers who count on school-related sales to boost their bottom line.

Clifton-based Linens 'n Things, in particular, has a lot riding on its August sales results. The housewares retailer, which filed for bankruptcy protection in May, needs to draw lots of college students and their parents to its stores this month. Linens has always invested heavily in winning back-to-college sales, stocking its stores with merchandise such as sheets, comforters and dorm- room accessories. This year, the stakes are higher. Linens needs to generate cash flow and convince lenders and vendors it still is a viable retailer as it prepares to close 177 of its 589 stores.

Linens' top rival for back-to-college sales is its New Jersey neighbor, Bed Bath & Beyond Inc., the country's largest specialty housewares retailer. Bed Bath in recent years has had to fight off competition from Wal-Mart and Target, both of which have expanded their home departments.

The Children's Place Retail Stores Inc. in Secaucus is banking on a mix of prints, patterns and subtle plaids, as well as a heavy investment in fall's hot color, gray, to fuel its fall sales.

"We feel very strongly about the color gray," said A.K. LaMonica, senior director of apparel for the 903-store chain. "From a trend perspective, it was so obvious and in your face it was almost our duty to go with it," she said. "And our early reports are that it's being widely accepted."

The chain also made a conscious decision to include more warmer- weather clothes such as shorts and skorts (skirt-short combinations) in its first fall offerings, a reflection, LaMonica said, of the consumer's desire for "buy now, wear now" merchandise, rather than the past practice of buying clothes in advance of cold weather.

The current economy could provide a boost for South Jersey-based retailer Burlington Coat Factory if more parents seek off-price and discount options for school outfits. Burlington, which has a store in Paramus, plans to promote the fact it is one of the few retailers that still accepts layaway purchases, and also emphasize that its prices routinely are as much as 60 percent below department-store prices. "We're not going to play the high-low game," said Burlington spokeswoman Audrey Shapiro. "We're going to put it out at a great price."

The chain, which will add 30 stores by the end of this year to push its total to more than 400, plans to unveil a new back-to- school advertising campaign within a few days.

"Back to school is very important for us," Shapiro said. "Going back to school with new clothes is kind of like a rite of passage for children," she said. The chain also does a sizable business in school uniform sales.

Preview for holidays

Back-to-school merchandise is a small sales category for Wayne- based toy retailer Toys "R" Us Inc., but the season is a good warm- up for Toys' main event, holiday sales. Most new holiday toys arrive in stores in August or September, and parents who come to Toys for a school backpack or crayons may see something they want to buy to put under the Christmas tree. This year, Toys has created "Back to Cool" school supplies mini-boutiques in its stores and is advertising free lunch kits with the purchase of a backpack.

The National Retail Federation is predicting that despite high gasoline prices and other economic pressures, American parents will spend $51.4 billion on back-to-school and back-to-college purchases this year, up from $50 billion last year.

"People are still spending. So if you are a retailer, how do you make sure that what they're going to spend they spend with you?" said Tara Weiner, senior consumer business leader and managing partner for Deloitte.

Weiner believes that cash-strapped consumers are asking themselves this year, "Do I really need this?" as opposed to saying, as they did in the past "I deserve this; I'm entitled to it."

Weiner said retailers have to make sure that once they get shoppers in the store or on their Web site this year, they "close the deal" by having the merchandise and service the customer wants.

Retailers also are using their online resources to lure shoppers into their stores, said Thomas Harpointner, chief executive officer of AIS Media, a Georgia-based provider of professional e-mail services. He said there has been a 42 percent increase in commercial e-mail from retailers to consumers over the past year as retailers send target coupons and discount offers to shoppers.

"Parents are less likely to purchase clothing for their kids online," Harpointner said. "They want kids to be able to try these clothes on to make sure they like them, to make sure they fit. So very savvy retailers are using e-mail newsletters and e-mail coupons, not to drive Web-site traffic, but to drive in-store traffic."

Beemer believes budget concerns could send more shoppers this year to stores such as Target and Wal-Mart.

In his company's most recent consumer survey, the number of shoppers who said they planned to shop at Target almost doubled from last year, and Beemer believes those are shoppers who are trading down from stores like Abercrombie & Fitch and Hollister.

Retail analysts said the key questions for this back-to-school season will be whether teens and pre-teens will let their parents save money by trading down to less-fashionable apparel choices, and if older teens will spend their summer job money as freely as in the past.

At Garden State Plaza last week, Rutgers University sophomores Joe Maza and Andre Sousa and Bergen Community College sophomore Anthony D'Agostino said they'll do things like save on gas by sharing rides before they'll cut out new clothes purchases for back to school. "We're too vain to do that," joked Maza.

The trio, all from Hudson County, said they expect to purchase clothes from Guess, Abercrombie & Fitch and Ruehl before school starts, although they like the prices at Wal-Mart and Target for basics like socks and T-shirts.

Jeff Green of Jeff Green Partners in Mill Valley, Calif., is one retail expert who thinks the Joes, Anthonys and Andres of this country will give apparel retailers a better-than-expected August and September.

"I know everybody else is thinking that apparel's going to be down, but I just don't that the kids will let it happen."

"I don't really think that teens will allow their moms to trade down," Green said. "Teens can't afford to be dressed in something that isn't the trend."

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Can N.J. sellers solve the equation?

The Children's Place Retail Stores Inc.

Secaucus

The assignment: Keep up the sales momentum it has enjoyed in recent months and outperform last year's results. To do that, it has to beat a 4 percent same-store sales increase in August, 2007, and a 2 percent decrease in September.

The game plan: Have trend-right fashions with an emphasis on patterns, and the season's hot color gray. Offer a variety of price ranges.

Linens 'n Things

Clifton

The assignment: Sell enough sheets, towels and dorm-room accessories to the back-to-college crowd to improve cash flow and convince lenders and vendors that it will be able to emerge from bankruptcy.

The game plan: Well-stocked stores, "Destination Dorm"-themed displays, competitive pricing.

Bed, Bath & Beyond

Union

The assignment: Stay the course, outlast Linens, and become the valedictorian of the housewares specialty space. Lure more back-to- college shoppers than Linens and discounters Wal-Mart and Target.

The game plan: Play to its strengths with large selections, customer service and lots of coupons.

Toys "R" Us

Wayne

The assignment: Toys isn't a major player in back-to-school sales, but the season serves as a warm-up to its main event: Christmas.

The game plan: Promote "Back to Cool" boutiques in stores, featuring backpacks and school supplies. Offer discounts on Elmer's Glue and scissors, and free lunch kits with backpack purchases.

Burlington Coat Factory

Burlington

The assignment: Position the off-price chain as a good back-to- school option for parents who want to save cash in a rough economy.

The game plan: Unveil an exciting new television campaign in August and promote features like the layaway option to help parents budget.

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New rules for back to school

In a recent survey by consulting and accounting firm Deloitte, 90 percent of Americans said they will change the way they shop for back-to-school items this year. Here are some of the changes they plan to make: (Respondents could choose more than one option, so numbers add up to more than 100 percent.)

* Spend less on clothes (83 percent)

* Buy more items on sale (79 percent)

* Buy only what the family needs no extras (70 percent)

* Trade down to lower-priced merchandise (68 percent)

* Use more store coupons (53 percent)

* Shop at less-expensive stores (46 percent)

* Do more online research to find the best price (27 percent)

Source: Deloitte LLP

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E-mail: verdon@northjersey.com

(c) 2008 Record, The; Bergen County, N.J.. Provided by ProQuest Information and Learning. All rights Reserved.

Story Source: Record, The; Bergen County, N.J.