Experts divided on growth of retail sales over holidays

Bargain hunters flocked to the nation's malls and shopping centers Wednesday, raising hopes that an otherwise lackluster retail season might still be salvageable.

They came not only to cash in on discounts but to redeem gift cards, one of the big winners of this year's holiday season.

Helped by shopping through New Year's Day, retail sales could be up 6% over last year, Customer Growth Partners, a consulting firm, said Wednesday. That defies most other predictions, but CGP President Craig Johnson said in a statement: "Never in the history of retail forecasting have so many been so wrong about so much."

By noon Wednesday, many shopping center parking lots were jammed amid generally good weather across the country, said Wally Brewster, senior vice president of General Growth Properties, which operates 225 malls. Another big mall operator, Taubman Centers, reported most shoppers came in for new purchases, not just returns or exchanges.

If retail spending growth ends up more in line with the seasonally adjusted 3.6% that MasterCard Advisors' SpendingPulse found from Thanksgiving through Christmas Eve, it would be significantly down from some of the stronger years of the past, said Steven Keith Platt, director of the Platt Retail Institute. Retail sales during the holidays have averaged increases of 4.8% annually over the past 10 years.

This year, consumer spending has been dragged down by lower home values, continued high energy prices and uncertainty about the economy. "People don't have any money. It's really that basic," Platt said.

Others weren't as pessimistic. "This is not that bad," said NPD Group retail analyst Marshal Cohen. "The numbers came in right where I expected them to be." Holiday winners included:

•Gift cards. About 61% of consumers gave a card this season, up from 48% last year, according to an online survey by NPD Group. Because sales aren't booked until cards are redeemed, they stretch out the holiday season.

Retailers "missed the boat" when it came to giving customers the kind of discounts and exciting merchandise they expect, said Britt Beemer, founder of America's Research Group, which conducts consumer surveys. Shoppers "ended up buying gift cards as a way to deal with it."

•Electronics. While sales of apparel languished, consumers snapped up cameras, big-screen TVs, personal navigation systems and, especially, electronic games. Platt said he cruised five stores to try to find an in-demand game.

•Online retailers. Fed up with long lines, more consumers turned to their computers to buy gifts this year. Online sales rose 22% over last year, MasterCard MA says. Shares of Amazon, the big online merchandiser, posted a 2% gain Wednesday, while shares of Target tgt, Macy's m and Kohl's KSS all fell.