NEW YORK (CNN/Money) -
The 2003 holiday shopping season may not be as feeble as last year's, but some industry watchers say it certainly won't be a holly jolly Christmas either for retailers.
Less than a month after the National Retail Federation said holiday sales this year are expected to ring their best gains in four years, skepticism is mounting that the forecast is "too optimistic."
Richard Hastings, chief retail analyst with Bernard Sands, says consumer spending will grow weaker, not more robust, going into the key November and December shopping period.
Retailers can post half or more of their annual sales and profits during that eight-week period.
Said Hastings: "The consumer is scared. There is inflation in the economy, the debt level is rising. Job security is a real threat. The tax rebates and lowered tax withholdings did not really put a lot of money back into people's pockets. We're already getting reports of declining sales in September at U.S. chain stores."
Hastings will release his own forecast for the two-month period later this week, but he says it's not expected to be as optimistic as the NRF's outlook.
Outlook subject to change?
Last month, the industry association predicted holiday sales in November and December at general merchandise, apparel, furniture, electronics/appliance, sporting goods, hobby, book and music stores -- what it calls "GAFS sales" -- to grow 5.7 percent from last year to about $217 billion. Holiday sales in 2002 grew just 2.2 percent.
Hastings said he wouldn't be surprised to see the NRF lower its forecast. It wouldn't be the first time, either. The agency trimmed last year's forecast to 3.5 percent growth from an earlier 4 percent forecast for the holidays.
"Look at the macro indicators. Both consumer confidence and consumer sentiment are slipping," he said."The NRF came out with their forecast too early, when these indicators were showing improvement. You have to wait until the back-to-school shopping period ends before making an estimate for the holidays."
Like last year, the holiday season this year will be an abbreviated one with five fewer shopping days during the traditional peak time for shoppers between Thanksgiving and Christmas. This year there are 27 shopping days compared to 26 in 2002 and down from 32 in 2001.
Retail industry consultant Retail Forward said it expects holiday sales to grow a slower 4 percent.
"The economy and retail sales are on the rebound, but the signs suggest that it will be an uneven rebound," Retail Forward's senior economist Frank Badillo wrote in a report.
"Until consumers benefit from a pick-up in the job market, sustaining the rebound depends on a lot of one-time economic drivers such as the surge in mortgage refinancing and tax breaks," Badillo said. "Those one-time drivers should lose steam before a job rebound fully kicks in. The holiday season is far from a slam dunk for retailers."
Malachy Kavanagh, spokesman for the International Council of Shopping Centers (ICSC), called the NRF's outlook "bullish," adding that the firm's own forecast -- to be released early November -- won't be as high as a 5.7 percent gain.
"We'll definitely have a better showing this year given that last Christmas for retailers was the worst in a decade. However, it is still uncertain how much consumers will spend this year," Malachy said.
For its part, the NRF is standing by its forecast.
"There are always some people who will say negative things just to get attention from the press," said Ellen Tolley, spokeswoman for the NRF. "Our forecast is realistic. It's not spectacular. There are some lagging factors such as unemployment and energy costs that could bring it down. At this time we don't anticipate changing our forecast."