U.S. holiday retail sales are likely to rise 1 percent this year, as consumer confidence improves, the International Council of Shopping Centers (ICSC) forecast Monday.
Sales at stores open at least a year are expected to climb in November and December, after falling 5.8 percent in the same period a year earlier, the New York-based trade group said. It included Minneapolis-based Target Corp., Macy's Inc. and other chains in the calculations.
Confidence among consumers rose this month to the highest level since January 2008, as the pace of job losses slowed, according to the Reuters/University of Michigan index of consumer sentiment. Some retail capacity has been removed, and remaining stores are stronger, the ICSC said.
Leaner inventories will help retailers avoid heavy and unplanned discounting, the trade group said.
"This year's holiday spending season will be a lot better than last year," Mike Niemira, the ICSC's chief economist, said. "The wear and tear of the recession and financial crisis on the consumer psyche is slowly giving way to renewed hope, optimism and, most likely, gift-buying."
The ICSC forecast is more optimistic than projections by Deloitte Research and Retail Forward, which both forecast unchanged sales for November, December and January.
Restricted credit and unemployment -- which reached 9.7 percent in August -- will hamper consumer spending, New York-based Deloitte said Sept. 21.
Last year's holiday shopping season was the worst in four decades, ICSC said, as the deepest recession since the Great Depression curbed spending.
The year-end selling period is the most important for retailers, accounting for a third or more of their annual profit. Consumer spending makes up more than two-thirds of the U.S. economy.
