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Gloomy holiday sales forecast?

TEXT OF STORY

BOB MOON: The song says you better not pout if you hope to do well over the holidays, but retailers might have a reason to frown: A prediction that growth in holiday sales won't measure up to last year. Rachel Dornhelm reports.


RACHEL DORNHELM: Retailers are dependent on that green holiday spirit — and I'm not talking about trees.

Ellen Davis with the National Retail Federation, or NRF, says the holiday season accounts for 20% of all retail sales. Today her group released their 2006 forecast.

ELLEN DAVIS: This year NRF is expecting 5% holiday growth. That's down slightly from last year's 6.1% but it's still higher than average.

That means consumers will spend almost $460 billion. Still retail industry analyst Richard Hastings agrees this reflects a slow in growth.

RICHARD HASTINGS: The housing market more than anything else is what is influencing this feeling that people need to start being a little bit more careful.

Sectors dependent on holiday shoppers could feel this most, like book and sporting good outlets.

And, of course, jewelry stores. A full third of their sales come in November and December.

I'm Rachel Dornhelm for Marketplace.

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