Holiday sales growth expected to slow

Holiday sales are expected to rise, though at a slower rate than last year as consumers fret about the declining housing market, according to a National Retail Federation economic forecast Tuesday.

“The biggest factor driving our conservative outlook this year is the (slowing) housing market,” said NRF Senior Director Ellen Davis. “When people perceive that their homes aren’t worth as much as they were a few months ago, they could scale back spending.”

Still, total holiday retail sales are expect to rise by 5 percent, compared with a 6.1 percent jump during the same season last year. The gain could surprise some industry watchers who had expected that higher energy prices and economic uncertainty would crimp spending more.

Spending is expected to reach about $457.4 billion, up from $435.6 billion.

Retailers and economists closely monitor holiday sales for signs of how consumers are holding up against economic travails. About one-fifth of retail industry sales come during Thanksgiving, Christmas and Hanukkah, making it the most important period of the year for companies such as electronics retailer Best Buy Inc. and toy company Mattel Inc. .

“Consumers have faced a number of economic challenges this year and have taken them in stride,” NRF Chief Economist Rosalind Wells said in a statement. “Although sales gains will not be as robust as last year, retailers can still expect above-average holiday sales growth.”

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If energy prices, which have fallen recently, come down some more, spending could even beat NRF’s current forecast, Davis said.

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The 10-year average is 4.6 percent growth, according to NRF.

The NRF defines holiday retail sales as those which occur in November and December at most traditional retail outlets such as discounters, department stores and grocery stores. For its forecast, the NRF examines a slew of economic data including figures on housing, jobs and interest rates.

“Consumers make small sacrifices all year so they can splurge a little during the holiday,” said NRF President and Chief Executive Tracy Mullin, in a statement. “If gas prices continue to fall, shoppers will find a little something extra in their wallets, giving them even more reason to celebrate.”