An unstable economy will force most consumers to adjust their spending habits and spend less this holiday season.

That's according to the annual holiday shopping survey from the world's largest retail trade association, the National Retail Federation, which concluded that U.S. retailers should witness the smallest sales increase, 2.2 percent, or $470 billion, in six years. The federation also found that each shopper will spend only a relatively low 1.9 percent more dollars this year over last year.

National Retail Federation Spokeswoman Kathy Grannis said current financial conditions and low consumer confidence will force many shoppers to be more frugal and less willing to splurge. Retailers, in turn, are responding.

"Retailers are already offering deep discounts," Grannis said.

"We will have great sales, which we always do around the holiday season, and we will be completing a different marketing campaign," said Jim Sluzewski, coporate spokesman for Macy's Inc. in Cincinnati, which has a store in St. Clair Square. "We don't expect that the economy is good for everyone, certainly. You're never happy when sales are down, but we continued to out-perform our competitors in the past year, and we expect to continue to do so."

A Dillard's corporate spokesman could not be reached for comment.

The association has found that 40 percent of shoppers are expected to use debit and check cards to buy gifts this year, more than those who said they will use credit cards, the second-most-popular payment choice. Using cash or checks are anticipated to decrease again this year.

So to avoid using credit cards and being billed the accompanying interest rates when they don't have enough money, consumers are resorting to an old-fashioned alternative: layaway. It allows retailers to hold on to merchandise until the buyer pays off the debt owed along with a handling fee.

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