(Adds shopper quotes, JCPenney statement, Amazon gifts)
By Nicole Maestri
COLUMBIA, Maryland, Nov 29 (Reuters) - The stores are open, the prices are marked down, but U.S. consumers spooked by the economic crisis bought sparingly at the start of the holiday shopping season.
Shoppers interviewed on Saturday said they were disappointed by the deals this Thanksgiving weekend and bet stores will offer even steeper discounts closer to Christmas -- a worrisome sign for already struggling retailers.
The discounts combined with shoppers' reluctance to spend means overall holiday sales could fall from a year ago, marking the first contraction since the National Retail Federation began tracking holiday sales in 1992, experts said.
"Consumers are being very cautious about how much money they are spending," Stacey Widlitz, a retail analyst with Pali Capital said on Saturday. "I have very little confidence that the sales number will be up year-over-year," for the season.
The three-day Thanksgiving weekend can account for 10 percent of overall holiday sales and has taken on added importance this year as the country seeks a way out of its worst economic crisis since the Great Depression.
Heidi Hickman, a marketing manager, was browsing at a J.C. Penney store in Jersey City's Newport Centre mall on Saturday but gift-buying was not on her mind.
"I got a notice there are going to be layoffs in my department," she said. "It's making me stop right now and not do anything until I find out."
The weekend's results do not always indicate how overall holiday sales will turn out, but retailers that fail to lure shoppers face the prospect of slashing prices closer to Christmas, hurting already weak profits.
After opening at pre-dawn hours on Friday, department store operator Kohl's began its sales at 6 a.m. on Saturday, while competitor J.C. Penney Co Inc opened at 8 a.m.
Penney said shopping on Friday was strong as consumers sought deals on practical gifts, like sweaters. But it did not release sales figures for the weekend, saying the economic environment was too volatile.
Holiday sales growth was already forecast to hit its lowest level in nearly two decades and retailers have been slashing prices for weeks to salvage the season. In a highly promotional battle to attract shoppers, retailers like Kmart opened on Thanksgiving day, while others began sales at midnight.
America's Research Group's Britt Beemer said on Friday he saw shoppers carrying 25 to 40 percent fewer bags this year.
"If the item was there, they bought it. If it wasn't there, they left," said Beemer, calling this year's customer a "hit-and-run shopper."
PRICES WILL FALL
Alice Hughes, 45, made the rounds in Maryland on Friday, stopping at a Target, Sears, J.C. Penney and Macy's Inc, buying items like a treadmill and leather coats for herself and her daughter. But she was not impressed with the prices and expected them to fall closer to Christmas.
"I think they're playing," she said of retailers. "They tell you they're marking down, but they're really not."
Many shoppers were only buying gifts for children and said they would find other ways to celebrate with adult relatives and friends.
Consumer electronics, toys and clothing were in highest demand at the start of the weekend, according to the National Retail Federation.
Amazon.com Inc said Apple's iPod touch, which has a touch-sensitive screen, was its top selling electronics item Black Friday morning, while the Wii Fit, for Nintendo Co Ltd's Wii video game console, was its most popular video game.
Widlitz expects discount behemoth Wal-Mart to win shoppers this holiday because of its low prices.
At a Wal-Mart store in Columbia, Maryland on Friday morning, the parking lot was full at 7:30 a.m. and customers stood in line 10 shopping carts deep to purchase flat-screen televisions, $8 jeans and $4 pajamas.
The frenzied bargain-hunting took a somber turn on Friday when a worker at Wal-Mart in Valley Stream, New York, died in a stampede by shoppers who broke down doors to enter the store at 5 a.m. EST (1000 GMT).
Meanwhile, mid-tier retailers like department store operator Macy's and specialty chains AnnTaylor Stores Corp are fighting to keep customers and eke out profits.
At Ann Taylor's LOFT chain on Friday, the retailer was offering 40 percent off its sale prices, and an additional 20 percent off on purchases rung up before noon.
In a sign of how much consumers have put the brakes on spending, November retail sales at U.S. chain stores open at least a year could fall 2.4 percent, or 7.1 percent excluding Wal-Mart, compared with 4 percent growth last year, based on analysts' forecasts compiled by Thomson Reuters. (Reporting by Nicole Maestri; Additional reporting by Alexandria Sage in San Francisco and Aarthi Sivaraman in New Jersey, Editing by Sandra Maler)