After strong growth in the first half of the year and more subdued growth in the third quarter, retailers are anticipating the arrival of the all-important holiday season, which accounts for nearly one-quarter (22.83%) of annual retail sales. According to the National Retail Federation (NRF), total holiday retail sales are projected to increase 4.5% over last year's holiday season, bringing holiday spending to $219.9 billion.

"Although consumer spending has been inconsistent in recent months, we expect the holiday season to bring more stability to the industry," said NRF Chief Economist Rosalind Wells.

One factor affecting holiday sales growth will be tough sales comparisons over last year. Holiday sales growth of 5.1% in 2003 was easy to achieve since sales the year before rose only 1.2%.

Wells said economic factors affecting holiday sales this year would include higher energy costs, rising interest rates, geopolitical threats and slow income growth.

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