The news keeps getting worse for a weak consumer electronics sector, with word of Circuit City's bankruptcy filing and continued reports of a bleak holiday shopping season for large chains and local specialty stores.

"Anyone who says they were not affected by the meltdown would be lying to you," said Leon SooHoo, owner of home theater retailer Paradyme Sound and Vision on Fulton Avenue. "We rely on consumer confidence. As long as confidence is in the toilet, we'll be impacted."

The holiday season is historically strong for consumer electronics.

But this year, retailers are concerned. Analysts are downright pessimistic. And shoppers in a thrifty mood are circling stores, hunting for bargains and willing to wait for a better deal.

It's a difficult environment for Circuit City, which is arranging financing to stock up its stores for the holidays in a fight for survival.

The area's five Circuit City sites – Sacramento, Citrus Heights, Elk Grove, Folsom and Roseville – survived the nationwide round of 155 store closings announced last week, and the locals were gearing up for the challenge.

"We're ready for it," said Keri Rosson, operations manager of the Circuit City in Citrus Heights. "We've been here too long to go away."

But a visit to area electronics stores on Tuesday hinted at how tough the battle will be.

Andrea and Mike Day of Elk Grove carted bags of parts and software across a Fry's Electronics parking lot in Natomas to rebuild their home computer. They live near a Circuit City in Elk Grove, but "it always seems like there are more employees than customers there," Andrea said.

Kim Nichols and husband Justin of Rocklin left Fry's a few minutes earlier. Their computer died, but their hunt for a new system would live on.

"Their (prices are) high for where we're at," Kim Nichols said of Fry's. "We're going to Circuit City."

Across town on Arden Way, Travis Howard of Sacramento was leaving Circuit City after browsing there.

"As a consumer, I'm nervous," Howard said of the Circuit City bankruptcy news. "How does a company this big file for bankruptcy? I'm headed over to Best Buy."

It's a game of musical chairs that has retailers searching for ways to draw customers.

"It's really hard to judge what will happen," said Bebe Assad, manager of Filco Discount Center in Folsom. "Business picked up after the election, but for the three months before that, it was not as good. We had a lot of tire kickers, but not as many buyers."

Assad said discounting will likely be the name of the game during the upcoming holiday shopping season.

"Service is important, but everybody wants prices," he said. "We're at cost or below cost. It's very difficult with all the competition out there, not only with the other (electronics stores) but the Internet."

Greg Perchal, owner of car and home entertainment firm Audio Xpress, said business has been so tough, he recently closed the company's West Sacramento store. His Elk Grove location remains open.

Custom fabrication work allows him to compete with the name retailers, but "it's not peachy with us here," he said. "I've been in business for about 15 years, and the last four months have been the worst I've seen. I'm hoping and praying that now that the election is over, people start coming around."

The forecast, however, looks bleak.

After a brief spring uptick brought on by the federal economic stimulus package, consumer spending nose-dived. October retail sales were at their lowest point in nearly 40 years.

And a newly released survey by Rockville, Md.-based ChangeWave Research shows consumer spending, particularly on electronics, will continue to lag.

Just 19 percent of those surveyed said they would spend more on consumer electronics over the next 90 days, compared with 43 percent who said they would spend less.

Two years ago, the same survey showed 52 percent would spend more.

"The U.S. consumer is going into fetal position," said Paul Carton, director of research at ChangeWave, which has monitored consumer spending weekly for the past eight years.

"People are trying to save money and reduce debt. People are starting to hoard," Carton said.

With consumer confidence and spending at low ebb, ChangeWave's Carton foresees a long stretch of rough seas ahead for retailers.

"Consumer sentiment is still completely awful," Carton said. "We're still in the middle of a raging storm and we don't have the first signal of dawn."

That means retailers have to look for new ways to grow their business. For Paradyme's SooHoo, sales may be slumping, but customers aren't willing to let their complicated equipment go dark.

Repairs, he said, are up 33 percent from a year ago.

Call The Bee's Darrell Smith, (916) 321-1040.