Expect upswing in retail sales, analysis notes

SAN FRANCISCO — A new analysis indicated that retailers should expect a modest increase in sales despite wavering consumer confidence.

The report, developed by global management consulting firm Kurt Salmon Associates, projected 2.1% to 2.6% growth in personal consumption expenditures for fourth quarter 2010. The analysis also showed spending on durable and nondurable goods will continue to outpace spending on services this holiday season.

The findings were based on Kurt Salmon's proprietary analysis of historical consumer consumption figures and intent to spend data.

"Now, a year and a half into the recovery, we are seeing discretionary spending picking up," said Todd Hooper, Kurt Salmon partner and retail expert. "Consumers are still settling into their post-recession spending rhythm. They know they have to adjust their spending, but they are still sorting out priorities. During this transition, they are not able to consistently anticipate how their spending will change for any given category."