Ho-ho hum?

Sporting a frothy white beard and cheerful red suspenders, Santa has been listening to children’s wishes in the faux enchanted redwood forest at Stanford Shopping Center for weeks now.

By Christmas Day, more than 7,500 kids will have sat on Santa’s lap, predicted Julie Kelly, the mall’s director of marketing and business development.

Unwrapped Wii sports packages — sponsors’ product placements — are strategically placed under gaily decorated evergreen trees. The goods will remain on display for several days at a time before other sponsors’ items take their place.

The shopping mall, like stores throughout the area, is leaving nothing to chance this holiday season, amid shaky national shopping figures.

In October, retail sales nationwide rose 1.4 percent over September’s figures but still lagged by 1.7 percent when compared with sales in October 2008, according to the U.S. Department of Commerce.

Unemployment in Silicon Valley remained relatively stagnant, hovering at 11.8 percent last month, according to the California Employment Development Department.

Overall, the numbers could signal a poor spending season for already struggling retailers. Owners of some Palo Alto shops are reporting a 10 percent decline in sales over last year and express grave concerns for the bottom lines.

But contrary to news reports that stores nationwide will reduce the amount of merchandise they’ll stock — so as not to be stuck with huge inventories if the season flops — Palo Alto retailers seem to be bucking the trend.

Mom-and-pop stores are broadening inventory or at least staying even, store owners said. They’ll offer discounts, incentives and inexpensive-to-moderately priced holiday items that don’t skimp on quality, they added.

Smaller retailers along Palo Alto’s University and California avenues are hoping niche marketing and customer loyalty will bring them into the black, they said. Staff at chain stores and larger retailers report they’ve assiduously studied their customers’ spending habits for the past months and are lowering their prices accordingly.

“You have to price as aggressively as ever. The customer will still buy, if you price aggressively enough,” said Willis Niffenegger, Sony Style store manager at Stanford Shopping Center.

Eric Hager, general manager at Palo Alto Sport Shop and Toy World, has been strategizing for weeks to ensure the most profitable holiday season possible, he said.

The toy store will offer a series of specials to run week after week and plans three to four special shopping days for organizations and schools in December, he said.

Andy Beugen, store manager, said the store has focused on key sellers such as Lego, the new Transformers and other hot items.

“With kids, it’s all who has it in stock,” he said. He’s banking on the hope that when larger stores run out of toys due to lower inventory levels, people will still find what they want at the venerable Palo Alto store.

Beugen said the sales so far this season look promising.

“Saturday (Nov. 7) was great. We beat last year’s record,” he said.

But Hager has some concerns.

“Because of the number of shops that are vacant downtown, there is less foot traffic, which indirectly affects businesses downtown,” he said.

At Shady Lane, a store on University Avenue, owner Alice Deutscher is expanding her product line to lure in as many buyers as possible, she said.

“If you don’t keep things fresh and different, people get bored. We’ve brought in new things and topped off with things people told us they loved,” she said.

The store was launched to sell work by local artisans. That vision still remains true, but customers can also find internationally known artists and designers such as Tabra, she said.

The store is also hoping to cash in on collectibles, such as popular Trollbeads of Venetian glass, which are added to bracelets and tell a person’s life story, she said. The store plans a Dec. 3 and 4 special show of the beads with giveaways.

“People get a free bracelet with upgraded clasp to start their collection of beads,” she said.

Shady Lane is also working to fill the niche for area beaders, offering bead strands no longer found locally since The Bead Shop on University Avenue closed, she said.

Deutscher also joined the Hometown Peninsula Independent Business Alliance, which was started in 2007 by Clark Kepler of Kepler’s Books and Magazines in Menlo Park. The group supports and networks with local businesses and promotes patronage of small, independently owned local businesses.

This season “value” is a key concept for Carol Cruikshank, co-owner with husband Gordon of California Avenue’s Leaf & Petal and downtown’s Cassis clothing stores.

Consumers will probably opt for a little less bling for much less buck when it comes to holiday apparel, she said.

“We’re trying to carry things in all price ranges so people don’t have to sell the farm to have nice holiday wear,” she said.

Customers can pick up a slinky yet practical outfit for $89 or more upscale attire for $400, with a range of prices in between, she said.

Sequins, rhinestones and glittery studs are in but in sophisticated styles, she said.

Last year, Cruikshank and her colleagues scaled back on the store’s inventory and have spent the year assessing customers’ preferences.

“We have a handle on our expenses and a better feeling for the price point people want,” she said.

The campaign is on to increase foot traffic at Stanford Shopping Center — and well before Black Friday, historically the biggest shopping day of the year. This year, that day falls on Nov. 27.

Stanford plans weeks of entertainment to get shoppers in the happy spending mood, said Kelly, the marketing manager.

The annual tree lighting takes place Saturday. There will be musical stage productions, strolling musicians, and giveaways of a prize every hour.

Weekend entertainment takes place on Nov. 28, Dec. 5, 12 and 19. New this year, the mall will give out holiday survival goodie bags with store discounts.

People come from as far away as San Francisco, San Jose and the East Bay to shop at Stanford, Kelly said.

“All of this (programming) is in place to encourage shoppers to come and feel good; to get away from their troubles and stresses,” she said.

In keeping with the economic climate, the shopping center has launched a new online Shop Smarter Savings program on its website, where daily store sales and retailer promotions can be located for savings. Then, there’s Twitter (twitter.com/StanfordShop) and Facebook.

“We tweet everything and anything,” Kelly said.

At the Sony Style store, stacks of Sony Readers — electronic devices that can store up to 350 digital books — were being set up for the holiday display last week. Priced at $199 to $299, Sony hopes the Readers will be hot sellers this year, store manager Niffenegger said.

The company hasn’t been doing any second guessing — it is just following what customers have been asking for throughout the year, he said. Big-screen televisions and camcorders, which run from $400 to thousands of dollars, will be there too, but they won’t be the focus.

Lower-cost items aren’t a guarantee of strong sales, though.

“It used to be, ‘Stick a 10-percent-off sign up’ and that was enough,” he said, but even the low-cost readers have a hook.

“We’re giving away a free leather cover with it. There could be 100 free books with a purchase. You just have to pile it on. You want to reach people who want it and will introduce it to others,” he said.

Some products, however, just sell themselves.

“PlayStation 3 — you just have to keep up with demand on that. You just sell those hand-over-fist for the holidays for the grandkids,” he said.

At another national retailer, Restoration Hardware on University Avenue, this year’s marketing theme is “affordable luxury.”

“You will find our prices reflect the temperature of the economy,” said Donata Maggipinto, a company spokeswoman.

Restoration is focusing on categories of items that are always popular with customers and introducing new items within those categories, she said.

“We are recognized for our cashmere collections and our Luxury Plush collections. And of course, we offer our stocking stuffers,” she said, referring to the retro metal toys, joke and novelty items and games.

A big seller the company is banking on this year: “The Ultimate Beatles Collection,” with all of the United Kingdom-produced works remastered at Abbey Studios, and a 200-page, color book of album art.

The cosmetics industry is looking to deep discounts to draw in customers.

“Feel good saving. Feel good giving. Buy one get one 50 percent off” is the mantra at the Body Shop at the Stanford mall.

At L’Occitane cosmetics and beauty store, popular items are bundled into boxes and “everything is put on huge discount,” according to sales associate Ashley Mendez.

A collection of lotions and shower products that normally sell for $99 are priced for $49. A bath soap, candle and soap set retailing for $63 is now $49.

And there is a “friends and family” sale, offering 25 percent off of products when customers provide a shopping code.

The incentives seem to be working, Mendez said.

“People are pre-shopping and putting things on hold for Christmas presents. … The first week in November, sales were 20 percent up. Let’s hope it stays that way,” she said.

A few independent business owners are banking on the loyal clientele they’ve cultivated in years past to help them hold steady this season.

“I’m pretty optimistic,” said Gwen Gasque, owner of Letter Perfect card and gift shop on University Avenue.

“Customers seem a little more relaxed, and leather wallets and cards are selling particularly well,” she said. “My only fear is we don’t run out. On the other hand, that would be a good thing.”

Letter Perfect has always had the support of an upscale clientele, she said, and that group seems to be faithful.

Lisa Wolff, manager of the Paper Whirl on University Avenue, said the store also relies on a base of “regulars” during the holidays.

“People come here for the large ornament selection. It’s always been a big deal for us,” she said. The store also produces Christmas cards and custom holiday cards, she added.

Down the street at the Play Store, owner Julie Chen said her store also fills a niche by offering high-quality and educational toys rather than the latest hot item. Her clientele comes in with a particular ethic for quality and substance, she said.

But she voiced the underlying concern expressed by most independent retailers in town.

“It’s not a Fortune 100 holiday season,” she said.

“I don’t know what will sell this holiday season. We have to be careful and watch our cash flow. Our expenses are higher than they ever have been before. Come January, if we don’t have the (sales numbers), the cash won’t be there in six to nine months,” she said.

Deutscher of Shady Lane said it’s anybody’s guess as to what the season will hold, but she’s hoping that loyalty will play a role.

“We’re going into it with a positive attitude. We’re hoping against hope that people will come out of their way to shop locally and support local businesses,” she said.

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