US holiday shoppers to spend 7.5 pct more - Visa

NEW YORK, Nov 3 (Reuters) U S shoppers will spend 7.5 per cent more this holiday season, as rising employment and falling gasoline prices spur demand for a wide range of products, credit card group Visa US estimated.

More people will shop online to avoid crowded stores, though malls will enjoy solid traffic, Visa said yesterday. At the same time, spending may be tempered as a stagnating housing market leaves consumers wary of pulling equity from their homes.

''It's a mixed bag,'' said Visa economist Wayne Best. ''Americans will continue to look for value purchases that won't leave them strapped for cash in the long run.'' Visa's forecast appears slightly more bullish than other recent projections.

On Wednesday, accounting firm Deloitte&Touche USA projected a 7 per cent increase in holiday sales, and rival Ernst&Young projected a 6.5 per cent increase.

In September, the National Retail Federation said the slowing housing market will contribute to ''subdued'' holiday sales growth of 5 per cent. That's down from 6.1 per cent a year earlier, when holiday sales totaled 435.6 billion dollars, it said.

The holiday season typically generates more than one-fourth of annual U S retail sales. This year may get a boost because Thanksgiving falls early, on November 23, leaving five full shopping weekends before Christmas.

Visa said consumers may spend more on things they and their families value most, such as dining out or seeing movies.

Specialists in hobbies, sporting goods and electronics may benefit, with good demand expected for big-ticket entertainment products such as high-definition TVs, Visa said.

In contrast, appliance and furniture sellers might fare less well, Visa said. Big-box retailers may see moderate sales growth, but less than in 2005, it said.

Visa issued its forecast as retailers were reporting lackluster October sales, signaling a possible weak start to the holiday season.

Wal-Mart Stores Inc. was perhaps the biggest disappointment, projecting unchanged November sales at stores open at least a year.

October sales at Gap Inc and Target Corp also came in below analysts' forecasts.

In contrast, Macy's parent Federated Department Stores Inc, J.C.

Penney Co. and Nordstrom Inc., posted better-than-expected October sales.

San Francisco-based Visa last month announced plans to offer shares via an initial public offering. Smaller rival MasterCard Inc.

went public in May.

Reuters HB DB1019