Holiday sales expected to rise 1% compared with last year

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It’s no Miracle on 34th Street, but shoppers this Christmas are expected to spend with a little more cheer compared with last year’s dismal holiday season.

Retail sales during the November-December period are expected to increase 1% at major U.S. chain stores open at least a year, according to the International Council of Shopping Centers.

The report, released today, shows continued weakness in the battered retail industry, which for months has suffered as frugal shoppers have avoided malls, slashed spending and hunted for discounts.

That led to the worst holiday season in four decades in 2008, despite some of the most aggressive markdowns ever seen on merchandise including electronics, apparel and luxury goods.

The projected 1% increase is much better than the 5.8% decline for the same period last year, but chief economist Michael Niemira warned that retailers were still hurting.

“One percent is not strong,” he said. “It’s just considerably stronger than we’ve been seeing.”

-- Andrea Chang