That's the challenge facing retailers here as they gear up for their most important sales period - the year end. This can easily account for 30 to 40 per cent of their entire year's sales, said Mr Steven Goh, spokesman for the Orchard Road Business Association.

But given the economic downturn, retailers and malls expect shoppers to tighten purse strings and look out for bargains.

Consumer confidence here dropped to its lowest level in more than three years, as revealed by the latest Nielsen Company report last week. Of the 500 Internet users here polled between September and last month, about 70 per cent said they will put extra cash into savings, while 68 per cent said they will spend cautiously during the Christmas season.

'Sales will be, at best, on par with Christmas last year,' said a spokesman for RSH which brings in labels like Zara, Mango, Massimo Dutti, Pull & Bear and Ted Baker.

Given the big jostle for customers, retailers are understandably tight-lipped about sales strategies. 'It's very competitive now; we can't let other stores know what discounts we are going to give or when we are doing it,' said an employee of a major department store.

Said Ms Tan Swee Lin, senior manager of advertising and promotions at Marina Square mall: 'It's always a challenge to come up with exciting marketing programmes for Christmas as everyone wants to stand out from the pack.

'It is even more so amid the downturn as people will be conscious to stretch their dollar and look for value-adds.'

What's known is that some retailers have brought forward Christmas promotions, typically rolled out in mid-November.

RSH, for instance, launched them two weeks ahead for its various brands. Others, like fashion chain Topshop, held sales as early as last month to clear old stock.

Frasers Centrepoint Malls is offering premiums such as Mr Men and Little Miss umbrellas and calendars at its malls, which include The Centrepoint, Causeway Point and Northpoint.

The festive shopping period between Christmas and Chinese New Year is one of two peaks in the retail cycle here. The other is the mid-year Great Singapore Sale (GSS).

'The GSS is heavy on discounts and promotional offers, and is a time when retailers are selling at very low margins, and sometimes even below cost. The year-end period is for full-margin retailing,' said Ms Lau Chuen Wei, executive director of the Singapore Retailers Association.

But she is seeing retailers dangling discounts as early as one month before Christmas. 'This is not normal but it is what retailers are resorting to to get customers,' she said.

Mr Gerard Goh, sales promotions manager at Isetan Singapore, thinks sales are not always the way to go.

'For better or for worse, we have to change, as opposed to just giving discounts, discounts and more discounts,' he said.

Its flagship Isetan Scotts store revamped its men's section after almost a decade and introduced labels like HE by Mango and Croquis, just in time for Christmas.

It may still be too early to tell if such efforts will pay off. Shopping typically intensifies in the week leading up to Christmas Day.

Mr Luke Lim, chief executive of retail strategist A. S. Louken, said despite the dip in consumer confidence, retailers should not reduce their activities but continue to invest in building their brands. 'Focus on what you're best at. If your value is in your affordability and price, then continue preaching that.'

At least one retailer is doing just that.

Sporting goods giant Nike will open its first flagship store in South-east Asia at Wisma Atria on Friday, to a tune of $5 million.

The 8,000 sq ft duplex store will boast new merchandise and services such as T-shirt customisation.

dawntan@sph.com.sg

Are you planning to splurge or cut back on your spending this Christmas? Let us know by e-mailing suntimes@sph.com.sg