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CHICAGO (Reuters) - Drop Santa at your peril. America's retailers face the prospect of a grim festive season as a toxic cocktail of high gas and food prices, the worst housing crisis since the Great Depression and financial turmoil on Wall Street look set to hurt holiday sales.
But despite -- and many argue because of -- the depressing litany of news on everything from foreclosures to wrangling over a whopping $700 billion bailout for Wall Street, there is one item retailers dare not cut from their holiday lineup even if they're looking to trim costs: Santa Claus.
"If any mall or department store in this country were to say they were not going to have Santa it would be suicide," said Susen Mesco, president of Denver-based event planning company American Events. "No matter what other sacrifices they have to make, parents will take their kids to see Santa."
Mesco and others in the Santa hiring industry say business is brisk, with demand for portly gentlemen with white beards and red suits on the rise for department stores, and corporate and private parties alike.
"We are going to have Santas everywhere where we had them last year and more places besides," Mesco said.
A heightened demand for Santas comes as no surprise to some industry experts, who say that with weak holiday sales predicted retailers will try to use Saint Nick to attract as many consumers as possible with gimmicks such as free photos of their offspring with Santa -- which are usually quite pricey.
"It's clear that this year there's not going to be enough to go round for retailers," said John Challenger, chief executive of outplacement consulting firm Challenger, Gray & Christmas Inc. "There will be a real free-for-all to get hold of those limited (consumer) dollars."
"Santas -- especially convincing Santas with a long track record of working well with children -- will be in high demand," he added.
The average Santa can make anywhere between $60 and $500 an hour, with the best Saint Nicks charging top dollar. Real beards are a plus. The only problem some Santas may face is retailers may cut their hours to save money, or some may go bankrupt.
Although larger retailers are more circumspect about their Santa-hiring plans for this year, smaller chains are forthright about plans to try to capture more consumer dollars with a healthy dollop of Christmas spirit.
The cards appear stacked against the American consumer.
Average gasoline prices fell more than 10 percent to $3.63 last week from a high of $4.17 in the week of July 7, according to the U.S. Energy Information Administration. But they are still up 27 percent from a year ago.
Apart from paying more at the pump, more Americans are out of work. According to the U.S. Bureau of Labor Statistics, the national unemployment rate hit 6.1 percent in August, compared with 4.7 percent a year earlier. Some 2.2 million Americans have joined the ranks of the unemployed in the past year.
Also, the U.S. Commerce Department said last week that home sales fell to a 17-year low in August. The department said on Monday that consumer spending was flat in August.
Consumers, who account for more than 60 percent of U.S. gross domestic product, are also facing tighter credit.
And the National Retail Federation has predicted U.S. holiday sales in November and December will grow at 2.2 percent, the slowest pace in six years.
Some economists have even predicted sales will contract.
Against this depressing backdrop, some retailers like Best Buy Co Inc have scaled back on holiday hiring.
Be that as it may, some retailers say they're pulling out all the stops to bring in customers, with the help of Santa.
"We are going to more than ever, with Santas in all our stores to help people get their minds off the economy," said Larry Whiteley, spokesman for Springfield, Missouri-based outdoor retailer Bass Pro Shops, which has 52 stores. "This should also help brand awareness, which is good for business."
Larger retailers were more reticent.
"There is only one true Santa, and he is at Macy's," said Macy's Inc spokesman Jim Sluzewski, but he declined to discuss holiday hiring plans.
Last year Wal-Mart Stores Inc had Santa Claus visit all its stores and offered free photos to children who posed with the man in red. Spokeswoman Linda Blakley said Wal-Mart had scrapped those plans and this year Santa will visit stores on a "market by market" basis as in previous years.
Timothy Connaghan has been a professional Santa for 30 years -- he even answers the phone with a bright and breezy "Santa Tim" -- plus owns realsantas.com and a Santa school. He said this year more retailers had approached him than ever.
"They're looking at their profit margins and thinking let's do more to get people in," Connaghan said. "They may trim an hour or so off Santa's visits to save money, but they'll rely on him to bring in the crowds."
Like American Events' Mesco, Connaghan argues that bad times or good, taking children to see Santa at the mall is an integral and emotional part of the holiday experience.
"Things can never get tough enough for most parents when it comes to a visit to Santa," he said. "It's recession-proof."
Additional reporting by Sarah Coffey and Nicole Maestri