“It’s going to be a tough year,” Mullaney said. “But for those that survive 2009, they’ll be able to take a lot of the remaining market share in 2010, when I think the recession will end.”

The retailer playing field already is beginning to dwindle.

In the past year, Value City Department Stores closed seven Baltimore-area locations, Boscov’s department stores closed three and C-Mart closed its Joppa location. Circuit City is closing 567 stores across the country, including 15 in Maryland. Filene’s Basement last week said it would close three area stores, and Home Depot said Monday it would close its two Maryland Expo home design centers.

While some retailers have shuttered stores, most have slashed staff. Since December, Office Depot, Saks, Macy’s, Best Buy, Williams-Sonoma and Walgreens have all said that would initiate job cuts in 2009. Even Target, the second-largest discount retailer in the country, this week said it would cut 1,500 jobs.

In every sense, retailers have gone into survival mode.

“There’s really nothing we can do right now but wait it out,” Mullaney said. “We’re not bigger than the economy.”

Short on optimism The cause of shrinking sales staffs and mounting store closings is simple — consumers aren’t spending the way they have in the past, and for a number of reasons: Increasing unemployment, declining home values and stumbling stock prices, to name a few.

“We’re in a pretty bad recession, but it has deepened in the last five months,” said Rosalind Wells, chief economist with the National Retail Federation. “All of the things happening in the economy have led to a sharp decline in consumer spending, and this downward cycle will not be easy to break.”

With that in mind, the NRF this week projected U.S retail revenues would decrease in 2009 for the first time in more than 30 years. After a modest 1.4 percent gain in 2008, retailers are expected to see revenues sink 0.5 percent this year.

Wells and other retail experts are looking for any bright spots in the economy, but the reality is bleak. Unemployment, already at a 16-year high of 7.2 percent nationally, is only expected to increase, and the country is still waiting for the housing market to “bottom.” Personal wealth has taken a beating in recent months, and in turn, so have retailers’ earnings.

“We’re not optimistic about consumer spending in the near term,” Wells said.

The only thing consumers seem to be optimistic about are drastic sales, but they’re still waiting to see how low prices go.

“I absolutely will take advantage of sales,” Jeff Bernstein, 51, of Baltimore, said Wednesday at the Best Buy in downtown Baltimore. “We still want to live, still want to do things. We are looking for good values now.”

Bernstein said he has cut back on his spending, though he was searching for a decent price on a flat-screen television.

“Most people are still waiting on the sidelines to see if it gets worse,” Bernstein said. “I think we’re in the trough of the economy now.”

Robert, 40, of North Carolina, who declined to give his last name, said he simply doesn’t have any discretionary money left to spend.

“I’ll buy electronics and clothes if you can find them on sale,” he said. “I used to plan for the future, but now it all looks different.”

Stimulus to the rescue?

Retail analysts are relying on the government to be a big game-changer. The NRF projects retail revenues will decrease in the first three quarters of the year, but will then increase 3.6 percent in the fourth quarter. The reason being that fourth-quarter 2008 revenues were historically bad (holiday sales sunk 2.8 percent from 2007), and that President Obama is intent on installing an $825 billion stimulus package to begin rebuilding the economy. “We’re counting on government to be the engine of recovery,” Wells said. Obama’s plan aims to stimulate employment, certain critical economic sectors and consumer spending. It includes $550 billion in spending on new projects and $275 billion in tax cuts, hopefully creating jobs and lessening the burden on consumer’s wallets. “Something should be done as soon as possible — it’s the only way to get us out of the downturn,” Wells said. “The longer they wait, the longer it will take to fix the problem.” The NRF is also lobbying for the government to incorporate three national sales tax holidays as part of the stimulus package. The holidays would be held during March, July and October, each lasting 10 days including two weekend. “The sales tax holidays really can give a boost to spending,” said Rachelle Berstein, NRF’s vice president and tax counsel. Seventeen states, including Maryland, have held sales tax holidays in the past. “I’m all for it,” Mullaney said. “Anything that stimulates the economy and makes consumers have a little better attitude.” Staff intern Daniel Furman contributed to this article. [email protected]