U.S. retail firms prefer to remain conservative about revenue projections for the forthcoming holiday season but see reasonable sales even as shoppers are quite wary about excess spending due to the prolonged economic downturn.

The increase in retail sales came to a halt in August after the prolonged debate on government spending at the U.S. House of Representatives squashed positive attitudes of consumers and pushed the economy closer to another round of recession.

While sales are projected to go up by at least 3 percent in the last two months of the year, this figure is less than what was achieved in 2010, according to research outfit Shopper Trak.

Earlier, the International Council of Shopping Centers announced that sales at U.S. shopping centers may rise to 2.2 percent or $449 billion, after a 5 percent increase in 2010.

"People are making lesser trips to shopping malls and smaller stores, but when they go there, they know what they're after," ShopperTrak Chief Executive Christopher Ainsley said.

U.S. retailers foresee mediocre profit gains this holiday season because of problems in unemployment, higher gasoline and consumer product prices.

"For online retailers, this means that there are lesser opportunities to convert browsers into actual customers and they will be under pressure to offer attractive selections, better in-store presentations and more targeted customer loyalty programs," Ainsley added.

This can also result into less impulse buying.

BLEAK OUTLOOK

In a related Reuters report, in 2010 the National Retail Federation said that "U.S. holiday sales reached $462 billion, up 5.7 percent over 2009, raising hopes the economic recovery was well on its way."

However, unemployment has remained a problem and consumer confidence has dropped to its lowest causing a lot of jitters among conusmers.

"Back-to-school sales have kept close to the company's projections and retailers understand the state of the economy and have planned accordingly, being careful about building inventory," Global Hunter Securities analyst Richard Hastings told Reuters.

"Sales of electronics will lag other holiday gift categories, rising only 1.2 percent, largely because of the limited number of blockbuster electronic gadgets that will be offered this year," ShopperTrak forecasted.