It's Christmas in July at recession-battered retailers

At the Toys R Us store in downtown Bellevue, moms wearing shorts and flip-flops push shopping carts alongside Santa Claus decorations. "Shop Early & Save," say the Christmas-colored signs, drawing attention to large bins of discounted toys.

Sure, Christmas is still five months away, but some stores apparently believe it's not too soon to prepare for what's likely to be another difficult holiday-sales season.

The trend, known as Christmas creep, is already well under way as stores try to prevent a repeat of last year, when holiday sales plunged for the first time since the National Retail Federation began tracking them in the early 1990s.

Data show shoppers are spending less and trying to buy only what they need amid mounting job losses, raising the stakes for this year's holiday-sales season — perhaps the only period when stores can persuade them to stock up on something other than food and toiletries.

Stores that push holiday sales in July appeal to cash- and credit-strapped consumers who want to spread their purchases out over several months, rather than leave them all to the final weeks of December, said Ellen Davis, spokeswoman for the National Retail Federation.

"The recession means people are less likely to want to buy on credit, and they prefer to do their shopping over a longer period of time so they're not surprised by a bill," Davis said.

This past Sunday, Toys R Us began marking down prices as much as $100 (55 percent) for a Hannah Montana Malibu Beach House and $90 (nearly 50 percent) for a new version of Guitar Hero. Spokesman Bob Friedland said the sale is the first of its kind for the New Jersey-based toy chain and offers "the types of deals you'd see during Christmas, but now."

The sale ends Saturday with an in-store event where kids can eat candy canes and decorate Christmas cards while their parents, at least in theory, get started on holiday-wish lists.

Earlier this month, Sears began selling holiday décor earlier than ever under the "Christmas Lane" banner at Sears.com and Kmart.com. It also set up holiday displays at 372 Sears stores nationwide, including one in Redmond and another in Lynnwood.

The promotions are a tie-in to layaway programs that Kmart and Sears reintroduced last year, offering an alternative to credit cards.

"If customers were looking to purchase a new artificial tree, this would give them the chance to do so and then pay for it over a course of time through our layaway program," said Sears spokeswoman Natalie Norris-Howser.

Nicholas White, a retail analyst in the Gerson Lehrman Group network and a former executive at the Zale jewelry chain, said shoppers don't want to walk into a store in July and feel like Christmas is "being shoved down their throats."

But if done well, he said, early holiday promotions can engage customers who are "looking to retailers to help them solve a big problem, which is how to pay for Christmas this year?"

"The last decade was, 'I'll buy two at twice the price,' because credit was easy. Now, money is very dear," White said. "You're into rationing and budgeting now."

Vivaksha Khanduri, an Eastside stay-at-home mom with three young children, said she'll shop for bargains and try to spend less this holiday season. Although financially secure, she said she worries about rising joblessness.

"We have cut a lot of our costs, and we're making sure we don't spend excessively like we used to," said Khanduri, who bought a tea set at the Toys R Us store in Bellevue this week to give as a birthday present.

Margie Willett, a stay-at-home mom from Mercer Island, also stopped by for a birthday present and avoided unnecessary purchases.

"I'm just going to get what I need and go," said Willett, looking at Lego boxes with one of her two children, Alec, who turns 7 next month. "I'm not the type of person who shops far in advance. I'd rather save my money now and not spend it until I need to."

— Amy Martinez

Anthropologie will open a 10,700-square-foot store at the Bravern mixed-use development in downtown Bellevue, joining a lineup that also includes Neiman Marcus, Sur La Table and Jimmy Choo. The Anthropologie store will open along with the Bravern's other retail tenants on Sept. 12, next to women's clothier Piazza Sempione off 110th Avenue Northeast. Founded in 1992 and owned by Urban Outfitters, Anthropologie has 127 stores in the United States and Canada, including one in downtown Seattle and another at University Village. — AM

Costco Wholesale will open its first warehouse store in Australia next month in Melbourne, with plans for a location in Sydney next year, Bloomberg News reported. "If Melbourne goes well and Sydney goes well we will be opening more soon after," Costco's Australian managing director Patrick Noone told the news service. — MA

Epilogue Books, a new- and used-book store on Northwest Market Street in Seattle's Ballard neighborhood, will close in mid-August. Owner Nathan Heath, who took over the 8-year-old store from his aunt in early 2008, said he's closing the store because its five-year lease expires at the end of August and he could not agree on new lease terms or find comparable space elsewhere in Ballard. A going-out-of-business sale began July 5. — AM

West Seattle Dawg opened two weeks ago at 7001 California Ave. S.W. in West Seattle with a dog bakery and ice cream, dog parties, dog-day care and limited overnight boarding. The ice cream is yogurt-based, said owner Rex Post, and all of the store's dog treats are sweetened with honey. — MA

Allrecipes.com said revenue grew by 40 percent during its fiscal year ended June 30, although it did not disclose the dollar amount. The Seattle-based company launches an Allrecipes site in Germany this month. It already has sites in the U.K., Australia and New Zealand, France, China and Japan. — MA

Dry Fly Distilling of Spokane releases its first whiskey next month. The distillery's first batch of the wheat whiskey will include only about 840 bottles. — MA

Retail Report appears Fridays. Melissa Allison covers the food and beverage industry. She can be reached at 206-464-3312 or mallison@seattletimes.com. Amy Martinez covers goods, services and online retail. She can be reached at 206-464-2923 or amartinez@seattletimes.com