Industry analysts expect holiday retail sales to increase a moderate 2.3% this year to $447.1 billion, according to the National Retail Federation.  While that growth remains slightly lower than the ten-year average holiday sales increase of 2.5%, it would be a marked improvement from both last year’s 0.4% uptick and the dismal 3.9% holiday sales decline retailers experienced in 2008.

“While many consumers will be wishing for apparel and electronics this holiday season, retailers are hoping the holidays bring sustainable economic growth,” said NRF President and CEO Matthew Shay. “Though the retail industry is on stronger footing than last year, companies are closely watching key economic indicators like employment and consumer confidence before getting too optimistic that the recession is behind them.”

Much like they have in previous years, retailers are expected to focus on supply chain efficiencies and inventory control this holiday season to limit their exposure to excess merchandise and unplanned markdowns. Companies are also expected to leverage new channels – like mobile – to drive sales and provide added service to customers who want to shop anytime, anywhere.

“While consumers have shown they are once again willing to spend on what’s important to them, they will still be very conscientious about price,” said NRF Chief Economist Jack Kleinhenz, Ph.D.  “Retailers are expected to compensate for this fundamental shift in shopper mentality by offering significant promotions throughout the holiday season and emphasizing value throughout their marketing efforts.”

NRF’s holiday sales forecast is based on an economic model using several indicators including employment, industrial production, disposable personal income and previous monthly retail sales reports. The retail climate has been uneven for most of 2010 as sales have not been able to maintain momentum due to concerns about the viability of the economic recovery.  NRF defines “holiday sales” as retail industry sales in the months of November and December. Retail industry sales include most traditional retail categories including discounters, department stores, grocery stores, and specialty stores, and exclude sales at automotive dealers, gas stations, and restaurants.

[Source:  “2010 Holiday Sales Forecast.”  National Retail Federation (NRF).  6 Oct. 2010.  Web.  14 Oct. 2010.]