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WASHINGTON, DC-Citing improved economic indicators, for the first time ever the National Retail Federation revises its holiday sales forecast upwards from an initial 5% to 6%. Not all analysts agree, however, with either the anticipated percentage of growth or the reasons for optimism.

NRF’s optimism is based on what it calls “a flurry of healthy economic indicators,” including strong October retail sales and falling gasoline prices. October retail sales rose 7.2% year-over-year, according to NRF, and that followed a 7.2%-increase this September.

“Recent consumer spending has surpassed our expectations,” says Tracy Mullin, NRF president and CEO, “and we expect this momentum to continue through the holiday season. Though our forecast remains cautious, we are confident that the holiday sales increase will be better than we originally anticipated.”

While NRF is not alone in its rising optimism for the season, there are dissenters. Even some market-watchers that express optimism set overall growth projections, compared with a year ago, below the 6%-level. Michael P. Niemira, chief economist for ICSC, stays with his earlier prediction of an increase of between 3% and 3.5% in comp store growth for November and December combined.

Hillsborough, NJ-based Clear Thinking Group projects an increase of between 4% and 4.5% this season. “While sales growth should fall short of last year’s 5.3% gain, the anticipated increase for 2005 is still fairly robust,” says Lee Diercks, a partner and managing director of the consultancy.

“Fuel prices have fallen rapidly over the past six weeks,” Diercks acknowledges, “but even with the decrease to an average of $2.20 to $2.30 per gallon this week, consumers are still paying almost 30% more per gallon of gas than they did last year. Additionally, the high cost of home heating fuel, particularly in the Northeast, will continue to have an impact on how much disposable income is available for holiday gift purchases.”

A Gallup poll, conducted between Nov. 7 and Nov. 10, reflects an anticipated increase to an average of $763 on holiday gifts this year, up from $730 in its 2004 poll. The current data “suggests that retail spending this holiday season will not be depressed and may exceed normal seasonal patterns, despite what some consider a negative economic climate,” says Frank Newport, editor of the poll.

By contrast, a Conference Board survey of holiday gift spending intentions, also conducted in early November, indicates that US households will spend an average of $466 on gifts this season, down moderately from the $476 its 2004 study of intentions showed. “Consumers appear to have less Christmas spirit heading into Thanksgiving this year than last year,” says Lynn Franco, director of the board’s consumer research center. “This cautious attitude will have consumers shopping for bargains this season. Retailers need to offer discounts and promotions to get shoppers into their stores.”

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