NEW YORK (CNNMoney.com) -- Retailers will be relying on promotions and other deals this year as holiday sales growth is expected to slow to the softest levels seen in years, according to a retail trade group.
The International Council of Shopping Centers (ICSC) predicts that sales at chain stores will grow by 2.5%, the lowest rate of growth since 2004.
According to the ICSC, personal income, a major factor in predicting spending rates, remains strong. However the embattled housing and mortgage markets, as well as higher energy prices, will cause consumers to tighten their purse strings. And retailers will have to go the extra mile to help loosen them.
"Holiday sales will be mixed and retailers will be offering promotions to drive traffic and sales this year," said Michael P. Niemira, the ICSC's director of research in a statement.
Gift cards have been an increasingly valuable tool for driving holiday sales, says the ICSC. They account for about 10-15% of consumer spending and the gift card market is expected to reach $80 billion this year.
Thirty to forty percent of gift cards are redeemed the week after Christmas and into January, causing the ICSC to extend their predictions beyond the traditional months of November and December.
The length of the holiday season is also expected to have an impact. Hanukkah, which starts on December 5th, will boost early season sales, while this year's Christmas, which falls on a Tuesday, will drive sales into the rest of that week. 
