Local retailers may be wringing in the holiday season this year as their counterparts on the Mainland brace for what may be the slowest sales growth of any Christmas season the past five years.

Following the official start of the shopping season Friday, most Hawai'i retailers will have their busiest time of the year during the next 4 1/2 weeks. Merchants can do one-fifth of their annual sales during November and December, with some such as jewelers doing as much as 30 percent or more of sales during the festive period.

But this year there are worries about how the mortgage credit crunch and higher gasoline prices will affect shoppers' budgets. The National Retail Federation, the leading retail industry group, is projecting sales will rise 4 percent this year to $474.5 billion.

It's the lowest projected rise since 2002. That's worrisome for retailers who placed orders weeks and months ago anticipating robust sales. Earlier this month J.C. Penney Co., Home Depot Inc. and Kohl's Corp. cut fourth-quarter profit projections, while Sears Holding Corp., owner of Sears, Roebuck and Kmart, lowered its end-of-year sales forecast.

"We're not going to have the big increases we've had," said George Whalin, president of San Marcos, Calif.-based Retail Management Consultants, who visits Hawai'i frequently and was in Wailea last week. He said this holiday season will be difficult and challenging for merchants "but we're still going to have an increase."

Locally, retailers are hoping for more than a 4 percent increase in sales, which is below the 5 percent rate of inflation experienced by Honolulu during the first half of 2007. There are indications that Hawai'i could do better than the national average.

"Sales throughout the year have been solid," said Fred Paine, general manager of Pearlridge Center, the state's largest enclosed shopping center. "We're really happy. For the holidays we're hoping that will continue as well."

He said in busy times merchants at the mall ask for space to park containers of merchandise so they can easily replenish empty shelves. Paine said it seemed like those type of calls have been coming from retailers more often this year.

One thing that could trim holiday gift budgets is gasoline prices, which are about 50 cents a gallon higher compared to a year ago and may inch higher in coming weeks. Crude oil futures had a record close on Friday in New York at more than $98 a barrel.

"That is a concern, but we just try to remain hopeful that things are strong enough here," Paine said.

Those worries have sharpened some retailers' focus coming into the holiday season. At Jeans Warehouse, the largest Hawai'i juniors fashion chain, there has been keen attention paid to value pricing.

Cindy Mikami, chief operating officer, said the company is trying to take advantage of Mainland worries by keeping an eye out for apparel makers offering special deals as retailers pull back from big inventory purchases.

She said that savings will be passed on to customers.

"We're putting more emphasis on making sure we have a lot of value-driven prices to offer the customer," Mikami said. Jeans Warehouse operates 26 stores under its namesake brand and the Local Fever name.

"We will focus on our customer and what we think they want."

On the Mainland there has been some sales lumpiness because warmer-than-normal weather has kept people outside doing other activities and crimped sales of sweaters, coats and other cold-weather gear. Here there was the University of Hawai'i football team, which may have cut into Black Friday sales as people stayed home to watch the team's game against Boise State, or avoided going out because of expected traffic around Aloha Stadium.

Black Friday takes its name from the lore that the day after Thanksgiving is the day that merchants transition from losing money for the year to making a profit, or going from red ink to black ink. In recent years it has traded places with the last Saturday before Christmas for honors as the biggest shopping day of the year.

Jeans Warehouse had a two-for-one sale on denim Bermuda shorts yesterday. But Mikami said the chain was offering good promotions on Saturday due to the expected late-day weakness on Friday because of the football game.

But while there figures to be plenty of hand-wringing there is at least one indicator that argues Hawai'i merchants should have a decent holiday season. Unemployment here is well below the national average. In October the state's rate was 2.7 percent, a full 2 percentage points below the national number.

"The one thing that seems to be holding up there pretty steadily is jobs," Whalin said. "When people are working, people are going to be spending some money."

Paine noted the low unemployment can cut both ways and the downside of Hawai'i's unemployment, the second-lowest nationally, can readily be seen at stores with help-wanted signs in almost every doorway.

"We're thinking about making it permanent signage," Paine quipped.

Another factor that favors the state's retail sales this season is the weak dollar. Merchants catering to the Japanese visitor market may see sales climb because the yen goes further now than just five months ago. Since the end of June the dollar has slipped 11 percent against the yen.

Bob Taylor, president and chief executive of Maui Divers, the state's largest fine jewelry chain with 63 stores, said his Japanese visitor business has improved with the stronger yen. Most of Maui Divers 57 stores in Hawai'i (it also has locations in California and Las Vegas) comes from the visitor market, with about 10 percent of the trade coming from local shoppers.

Taylor said he expected this portion of Maui Divers' operations to rise this year because the company did some remodeling of its Ala Moana Center store and because of its new line of chocolate-colored pearls. To make sure it gets its share of customers, Maui Divers is offering a free stuffed Honu with some purchases, and has put together a catalog of gifts that it is featuring in stores.

"The Hawai'i economy has been strong this year," Taylor said. "I expect the (local) business to be quite strong during the holiday period."

Bloomberg News contributed to this report.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.