U.S. shoppers may spend more money on holiday purchases this year, but that spending will increase at only about half the pace it did a year ago, an industry trade group study released on Tuesday found.
U.S. consumers plan to spend $923.36 for holiday-related items this year, up 3.7 percent from 2006, according to the National Retail Federation's holiday shopper survey.
But last year shoppers said they expected to spend $890.32 -- a 7.2 percent rise from 2005.
"Shoppers will be a little more conservative with their spending as they become more aware of the softness in the economy," said NRF President and CEO Tracy Mullin in a statement.
"It is safe to say that many retailers will be competing on price, causing this holiday season to be very promotional."
The NRF forecast last month that total U.S. holiday retail sales would rise 4 percent to $474.5 billion this year, marking their slowest gain in five years as the weak housing market and a credit crunch temper consumer spending.
Many U.S. retail chains, including Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research) and Target Corp (TGT.N: Quote, Profile, Research), last week reported September monthly sales that missed Wall Street's expectations.
The NRF consumer survey found that 38.2 percent of respondents said that sales or price discounts would be the most important factor to them when deciding where to shop -- up from 36.5 percent a year ago.
Most respondents said they planned to shop at discount stores.
More than 68 percent of consumers said they plan to shop at discount stores, compared with 70.3 percent in 2006. Meanwhile, 58.2 percent of shoppers said they will go to department stores, down from 61.6 percent last year.
But this year consumers expect to do 30.2 percent of their shopping online, up from 28.9 percent a year ago.
The survey was conducted for NRF by BIGresearch from October 2-9 and polled 7,837 consumers. The poll has a margin of error of plus or minus 1.0 percent, the NRF said.