NRF forecasts modest holiday shopping growth

Consumers plan to spend more this holiday season than in 2006, but they won't break any banks. According to the holiday forecast from the National Retail Federation (NRF) holiday sales will gain only about 4%.

by Kristina Knight

The NRF forecasts holiday sales will reach $474 billion; holiday sales are defined in the forecast as sales in the months of November and December.

NRF Chief Economist Rosalind Wells said, “With the weak housing market and current credit crunch, consumers will be forced to be more prudent with their holiday spending.”

The slowdown in holiday shopping growth is the lowest since 2002 when holiday sales grew only 1.3%.

Still there is good news for e-tailers.

According to a recent Forrester Research report, online shopping this holiday season could reach $33 billion. That is an increase of 20% over 2006 numbers. Researchers predict that there will be growth in gift cards, which is great for e-tailers who have plans in place to sell and redeem online gift cards. According to the survey 80% of consumers will purchase at least one item online this year.

While shopping, most consumers say free shipping offers are the biggest draw for online sites. With free shipping, users don't have to fight holiday crowds and don't have to pay extra to shop at their convenience.