NEW YORK -- An early projection for the 2011 holiday retail sales is in, and the expectations for the critical season are good, but certainly not great.
The International Council of Shopping Centers said it expects holiday sales to increase 3 percent this year. That's a slower pace than the 4.1 percent gain in 2010, as many shoppers are expected to remain worried about the economy.
The trade group for shopping malls said Friday that November-December spending should reach $250.2 billion, the highest since the 2007 peak, when spending totaled $251.7 billion.
The prediction would mark the second consecutive increase for the holiday shopping period following two straight seasons of revenue declines in 2008 and 2009, according to the trade group's measure.
The sales forecast excludes spending at restaurants, grocers, auto dealers and gas stations.
The ICSC predicted another measure of sales, revenue at stores open at least a year, will rise 3.5 percent for the period. That would be slightly lower than the 3.8 percent pace in 2010. The barometer is a key indicator of a retailer's health because it excludes stores that opened or closed during the year. "The sales trends paint a continued picture of unevenness," said Michael P. Niemira, ICSC's chief economist. "Luxury spending continues to be strong and consistent. Wholesale clubs are doing very well. The midtier retailers are seeing mixed performance. And the low-end retailers are a bit more challenged."
Niemira expects luxury retailers to perform best, with predictions of achieving a 7.5 percent gain in revenue at stores open at least a year for the holiday period. But discounters should see more modest 2.5 percent growth, he said.
Rising household costs in food and gas along with a weak job market are driving a wider wedge between the wealthy and everyone else. Wal-Mart Stores Inc., the world's largest retailer, cited in August that its low-income shoppers are having a harder time stretching their dollars to the next payday than they did a year ago.
It announced last week it was bringing back layaway for the holiday season. Meanwhile, middle-class shoppers are being squeezed and are veering more toward discount stores and dollar chains. But the wealthy have continued to splurge, even in August when the stock market swung wildly.
The National Retail Federation is expected to release its holiday revenue forecast early next month.