Retail consultants see healthy holiday season

Despite the economic fallout of Hurricane Katrina, fourth-quarter sales will increase 5 to 5.5 percent over last year, predicts consulting firm Retail Forward.

The company says it does not expect the growth to come from department store sales, which it predicts will remain flat as price deflation in apparel and home goods mitigates increased demand. But, the retail consultants project that high-end department stores will continue to perform well, according to a press release issued Tuesday.

Apparel and shoe stores will also see a weak holiday season, says Retail Forward, due to stronger discounting, competitive pressures, fewer compelling fashion trends, accelerated deflation and challenging year-to-year comparisons. On the other hand, discount stores and warehouse clubs will outpace many other retail channels through the holidays, thanks to new stores and cost-conscious consumers.

The consulting firm believes that consumer electronics and appliance stores will prove stronger than last year, as home buying, job and income gains, coupled with price declines, kindle growth.