I know it is way too early to begin thinking about holiday shopping, but not in the retail world. Two large retailing trade organizations has issued their forecasts for the holiday shopping season. The news isn't bad, it's just not all that good. National Retail Federation forecast 5% growth in retail sales for the 2006 holiday season over last year's holiday season sales of $435.6 billion. The average increase for each of the past ten years has been 4.6%.

So 5% is looking okay, as long as the downward trend in the housing market does not accelerate at the same time as gasoline and energy prices increase while consumers move into the colder months. Much of holiday retail spending is based on the psychological state of consumers. More negative news, such as Ford offering to buy out 75,000 employees, will put consumers in a defensive frame of mind. Preservation of capital will become widspread. Holiday spending accounts for 20% of all retail spending throughout the year.

Retail Forward Inc., another large retail trade organization, has issued its preliminary holiday shopping forecast of 5.5% increase over 2005, which was a banner holiday shopping period. Retail Forward has based its assessment on stable interest rates, a slowing housing markey and moderate increases in energy prices. This holiday shopping season is forecasted to be good for supercenters and discount clubs, while sales at higher-priced department stores will continue to lag. Retail Forward will provide a more detaled holiday shopping forecast via Webinar on Wednesday, 27 September 2006, beginning at 11 A.M. EDT.

Holiday shopping online is forecast to increase 23% from $27 billion in 2005 to $33 billion in 2006. While this may sound like a great deal of money, online sales account for just 3% for all retail sales.