The Cowen report, its annual online survey of consumers regarding their holiday spending plans, points out that retailers like Wal-Mart have already set the tone by slashing prices ahead of the traditional start of the holiday. Its report details a mixed bag for retailers, with some set to gain this year and others simply holding on or losing ground slightly as consumer spending shifts to and from different categories.

Among the factors underlying the forecast is the impact of higher gasoline prices, with 71% of those who responded to a Cowen survey indicating that they expect to spend less this year because of higher energy prices. The housing market is also a concern among consumers.

"Despite the anticipated promotional environment and decline in overall spending, we still see opportunities for select companies to have a strong holiday season," the Cowen and Co. report says. Among the companies that it views as well-positioned for the holidays are certain fashion brands and hardline retailers.

In fashion brands, for example, Cowen's 2006 survey indicates that 80% of respondents plan to spend at least the same or more in apparel and accessories, "making this the top gift giving category this holiday season for the first time in three years," the company's research shows. Regarding fashion brands overall, Cowen suggests that the improvement in how Macy's fared in the survey this year indicates success in the repositioning of the department store. Macy's moved up to fifth most likely retailer to be shopped versus 10th last year.

Among hardline retailers, Cowen expects Dick's Sporting Goods to be a top destination this holiday season, and, in general, Cowen sees consumer electronics as a top choice among shoppers this year, with 69% of respondents indicating that they are "somewhat to very likely to purchase consumer electronics products this holiday season." Among the products working in favor of the electronics category: flat screen TVs, next generation video game consoles and notebook computers.

Cowen conducted its holiday survey in early November, with responsesfrom 748 consumers from diverse age, household income and ethnic backgrounds. The survey asked consumers a wide range of questions pertaining to their holiday spending plans, the impact of higher energy costs, product categories where they anticipate making purchases and a host of other information. According to survey results, consumers plan to spend around promotional events and "expect full-priced purchases to represent only 34% of planned holiday sales."

Retail stores remain the dominant channel, capturing 54% of sales, but online sales growth is expected to continue to increase and will reach 33% this year versus 24% last year. Among retailers, Wal-Mart, Target and JC Penney will remain the top three, but department stores should show some improvement over last year.