Holiday sales seen down 1 percent

By Brad Dorfman

CHICAGO (Reuters) - U.S. holiday retail sales will fall 1 percent this year, according to America's Research Group, marking the first time the research firm has forecast a decline in almost a quarter century of surveys.

"This year looks so bad that even normally good signs for retail sales, such as more Americans staying home this Christmas, can't save the season for retailers," said C. Britt Beemer, CEO and founder of the research group, in a news release.

His forecast for a decline, the first in 23 years of conducting holiday surveys, was based on results of an America's Research Group/UBS Christmas Survey that found more U.S. consumers plan to spend less on the holidays this year than they have since the mid-1990s.

A total of 40.1 percent plan to spend less, the largest number in 13 years, according to the survey. Also, 35.3 percent plan to buy fewer gifts, an eight-year high in that response.

U.S. consumers have been hammered by a combination of soaring food costs, falling home values, tighter credit and an economy many believe is already in a recession.

A total of 44.6 percent said they would spend less this year due to higher grocery prices. Also, 52.6 percent have higher credit card balances this year and of those, 73.2 percent will spend less on gifts as a result.

Of consumers who will spend less this Christmas, the economy and job insecurity affected 38.6 percent, compared with 27.0 percent a year earlier.

Wal-Mart Stores Inc, already benefiting from consumers trying to save money, should do even better during the holidays, with 92.9 percent of respondents saying they would shop at the discount retailer, up from 85.3 percent a year earlier.

But only 9.5 percent of people said they would shop at a major department store, a 13-year low.

And, finally, shoppers are not looking forward to a great experience at stores, as 68.5 percent expect stores to be short-staffed. Of those shoppers, 21 percent said they will leave stores due to lower staffing levels.

The survey of 1,000 telephone respondents on November 6-8 has an error factor of plus or minus 3.8 percent.

(Reporting by Brad Dorfman, editing by Richard Chang)