NEW YORK (CNN/Money) - Consumers think of June 25 as one of summer's first days. Retailers think of June 25 as the halfway mark to Christmas. Industry watchers have both in mind, and they're actually talking about better holiday sales this year.

"Consumers have fewer distractions now. There's no threat of war any longer and the fourth quarter is traditionally a very strong sales period," said retail consultant George Whalin. "But it's not going to be gangbusters."

Retailers thus far have struggled to grow sales on a monthly basis amid a weak economy and a shaky labor market.

Sales at stores open at least a year, a key retail measure known as same-store sales, have not been particularly strong compared with the same period last year, according to Ken Perkins, analyst with First Call.

Sales were unchanged in March, up 3.7 percent in April, and up 1.8 percent in May this year, compared with a 6.3 percent rise in March, 1.3 percent gain in April and a 3.8 percent gain last May.

Christmas last year was brutal for retail sales despite heavy promotions, and merchants will only be too eager to erase the memory of the worst holiday shopping season in a decade. Holiday shopping fell 11 percent to $113 billion between Thanksgiving and Christmas, according to ShopperTrak, which tracks retail sales.

But Whalin thinks most merchants are better prepared for Christmas this year.

"Retailers are not going into the holiday season with big inventory. They are keeping it lean," added Whalin. "We're also looking at the back-to-school shopping period as a guidepost to gauge whether the consumer is more confident and ready to loosen up the pursestrings."

The outbreaks of the SARS virus in Asia earlier this year had analysts scrambling to identify its ramifications for the retail industry, given that Chinese manufacturers are key vendors to several U.S. apparel, toy and electronics companies.

Howard Davidowitz, chairman of New York-based national retail consulting firm Davidowitz & Associates Inc., said those concerns were overblown.

"SARS has not stopped factories from rolling out products in China," Davidowitz said. "The only effect it's had on U.S. businesses is that it has led to fewer visits from buyers to the region. So there have been less face-to-face meetings between buyers and suppliers, but companies have gotten around that by teleconferencing."

"Also, most big retail chains placed their Christmas orders months ago and the Christmas inventory was already in the pipeline before (the) SARS (outbreak)," Davidowitz said.

Wal-Mart Stores (WMT: up $0.94 to $54.68, Research, Estimates), the world's largest retailer, said it expects business to be " busy as normal" heading into Christmas.

"We're proceeding as normal with our logistics and planning for the Christmas inventory," said Tom Williams, spokesman for Wal-Mart. "SARS has caused no interruptions."

Toys retailer Toys 'R' Us (TOY: down $0.27 to $12.48, Research, Estimates) said the company is getting a head start and setting up its stores with its holiday products earlier than usual this year.

"We will have our Christmas set-up in stores by early September," said Ursula Moran, vice president of investor relations and finance with Toys 'R' Us. Moran would not comment about the company's holiday sales forecast but said SARS has not affected its Christmas orders.

Retailer J.C. Penney (JCP: down $0.01 to $17.07, Research, Estimates), which gets a bulk of its Christmas products such as clothing, toys and home decoration items from suppliers in China, said orders were on target and shipping of inventory would not be affected.

No. 1 electronics retailer Best Buy (BBY: down $0.37 to $42.59, Research, Estimates) said it is "cautiously optimistic" for the holidays this year. "Our digital products have done very well. Digital products were top sellers for us last Christmas and we expect their sales to accelerate in the fourth-quarter," said Ron Boier, executive vice president general merchandising with Best Buy.

Said Davidowitz, "Holiday inventory isn't the issue, but whether or not sales hit targets is an open question. The government has put a lot of liquidity into the market by way of tax rebates and rate cuts."

There's hope that the $350 billion tax cut package passed by the Senate last month will spur consumer spending. According to the latest tax cut package, family with children can expect to receive tax rebate checks beginning mid-July.

The Federal Reserve for its part has already cut interest rates 12 times since January 2001, andcould cut rates Wednesday. Economists think the rate cuts support consumer spending by putting more money in people's hands, by lowering the cost of borrowing.

"We'll have to see if these measures also will induce consumers to buy more in the second half of the year," Davidowitz said.