Consumers Hunker Down - Latest Forecasts

It's starting to become a broken record: Consumers are feeling pressure from higher food and fuel prices, from the housing market meltdown and the financial industry upheaval, and from credit crunches and approaching holiday stress.

Consumers hunker downBrand Keys says it expects to see sales decline by some 5 percent for the upcoming holiday season. Based on a survey of 16,000 consumers across all nine census regions, the New York-based brand and customer loyalty research consultancy finds that 35 percent say they plan to spend less on this year's shopping -- shelling out an average of about $775.

That estimate is decidedly more downbeat than projections recently released by the National Retail Federation, which is predicting a small increase of 1.9 percent, with shoppers spending an average of $832.36 on holiday-related shopping.

The International Council of Shopping Centers just released its forecast, calling for a gain of 1.7 percent. And last week, NPD Group predicted flat-to-declining sales.In short, cash-strapped consumers are hunkering down for the holidays. They won't totally walk away from spending, but will be more cautious, the experts seem to agree. They'll also be turning away from their credit cards and paying with cash.

A survey conducted last month by Javelin Strategy & Research showed 39 percent of consumers decreased their credit card usage, up from 37 percent in April.What's more, industry watchers point out that a growing preference for cash poses a more direct challenge to brick-and-mortar retailers who are struggling to lift sagging sales, as well as online retailers since computers don't accept cash."With credit cards, consumers spend 30 percent more (on purchases) than with cash," said Howard Dvorkin, a financial expert on consumer credit and the founder of Consolidated Credit Counseling Services, in a CNN Money.com article.And, if they're paying cash that means they'll be more selective in what they're buying and probably buy fewer items.

Also this year, consumers are expected to shop sooner, because there are five fewer shopping days between Thanksgiving and Christmas. Brand Keys reported that almost two-thirds of the consumers in its survey (60 percent) say they have already started shopping, looking for bargain gifts well before the traditional Thanksgiving kickoff period.