If Lehman's holiday sales estimates hold true, the 3% jump wouldbe below retailers' 5.2% spurt last year. Chain stores will have aharder time measuring up to their performances in 2003 because ofincreased fuel costs and a weak labor market, says a report issuedby the firm. Last year was helped by favorable income growth andlow interest rates.

One thing retailers have going for them is more shopping days,29 this year compared to 27 in 2003, Drbul notes. More thanone-third of holiday sales will occur during the week beforeChristmas, his report says. However, Christmas falling on aSaturday could hurt the companies because they will have one lessweekend selling day.

The report says Lehman is "enthusiastic about Target'sdifferentiated merchandising initiatives for the holiday season,including a broad assortment of décor items, toys, electronics,entertainment and food." It is also noted that Target has thecapability to double its US store count, which is currently at1,313 units.