Even with the uncertainty over America's military involvement in Iraq, Christmas holiday sales in 2004 should increase by 4 to 6 percent over last year due to an improving economy, says a Ball State University retail analyst.

A growing confidence by shoppers will cause them to spread a little extra holiday cheer that should boost retail sales over 2003, said James Lowry, who has been tracking retail sales for several decades.

"It may not be the kind of increases we saw during the economic boom of the 1990s, but right now it just stacks up to be a good Christmas season," he said. "More people have jobs now than last year, and salaries have improved. People are just waiting for those traditional end-of-the-year sales."

Lowry said a major economic factor to consider for the final three months of 2004 is the cost of gasoline, which is much higher than last year.

"Instead of buying something at a higher-priced department store or specialty retailer, shoppers may be looking at saving a few dollars and seek out the deals they can get at a Target or Kohl's," he said. "People only have so much money. Buying gas takes away from shopping."

According to several retail tracking organizations, retail sales topped $300 billion for the fourth quarter of last year. Lowry expects sales to pick up again in the last three months of this year.

"The economy has turned out much better than many people originally thought despite all the uncertainty over Iraq and the presidential elections," Lowry said. "Consumers don't like uncertainty, but the elections are close to being over and the economy seems to be doing better."

As in past years, discount stores and retail outlets catering to middle-class shoppers will attract the majority of consumers with major price reductions on merchandise Lowry said.

"Discount chains seem to understand that people are conditioned to be on the lookout for bargains because everyone is always looking for the best deal they can find," he said. "And, because of all the competition among retailers, I believe we'll see major discounts in the weeks leading up to Christmas. Retailers make as much as a third to half of their profits during the holiday season. They need to attract shoppers in large numbers."

(Note to Editors: For more information, contact Lowry at jlowry@bsu.edu or (765) 285-5192.)