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PRIMETIME NETWORK SPENDING IN 2000 $258.8 million

HOT BUTTONS Uncertainty abounds, but it's likely that Wal-Mart, with its hefty war chest, and Kmart, with a big push for its "blue light specials," will lead the charge.

As the stock market dips and rises like a theme-park roller coaster, as layoffs mount and as energy prices continue to skyrocket, shoppers have been white-knuckling their wallets. Just how the economic whirligig will affect retailers' upfront buys still remains highly subjective.

"Everybody is concerned about the economy and earnings, and that will obviously have a big impact on TV during this upfront," says Michael Pagnatta, president of Reach Media, New York.

But Pagnatta sees no need for full-blown despair among retailers. During the Depression era, for example, "the need for entertainment grew, and the industry even thrived during that time," he says, categorizing shopping as a modern-day form of entertainment. "If you put out a great [retail] product, the advertisers will follow."

Still, spending may vary widely from retailer to retailer. "My feeling is, the upfront buys will depend on [comparative store] sales and how things are going internally," says Mike Hackmer, senior manager of research at the International Mass Retail Association.

By and large, the mass merchants that Hackmer studies are faring well, even in these tricky economic times. The low-price retailer Dollar General, one of the fastest-growing chains in the country, opened 700 stores last year. "Most of our members are still hitting good numbers," he says. "We haven't been as hard hit as department stores."

Another large retailer riding high through the economic turmoil is Wal-Mart, the world's largest store. Last year, Wal-Mart's revenues increased 12.1 percent to $122 billion, giving it extremely deep pockets to draw from for an upfront onslaught of its "Everyday low price" message. The company opened 33 stores last year and intends to remain aggressive in fiscal 2001 by opening another 40.

Its nearest competitor, Kmart, with 2000 revenues slightly over $37 billion, is embarking on its biggest marketing push ever with the return of the famous "blue light specials." This is part of an initiative announced early in April to reconnect with consumers and turn the company around. Kmart will likely increase its TV outlays while looking to cut other, less effective efforts and focus more directly on consumers, according to Brent Willis, executive vice president and chief marketing officer.

JC Penney has been caught in the midmarket muddle between mass merchandisers on the one hand and upscale competitors on the other, and it's closing stores in both its department-store and drug-store operations. A $200 million campaign around the theme "It's all inside" kicked off last fall; the concept works on three levels to reposition the brand as a store, a catalog and a Web site that customers can rely on to find their personal style. The company is mum on ad plans for the rest of the year.

At Target, the marketing focus can be seen in recent ads touting its new Mossimo line of clothing. Gap, which just launched a round of ads that are a paean to spring, is expected to be active.

Sears is coming off a solid year and anticipates that its national TV advertising, which includes a broad base of network, cable and syndicated programming, will be about the same as last year. "We continue to measure how our target customers use national TV, and our marketing plans reflect the best opportunities to reach Sears customers," says Perianne Grignon, director of media services.

Sears' plans, like those of the others, remain under wraps. Executive vice president of marketing David Selby will say only that as the eighth largest advertiser in America, Sears is committed to spending its marketing and advertising dollars responsibly. "We're always looking at new ways to leverage our power," he says. "Keep your eyes on us."