• by Sarah Mahoney  @mahoney_sarah, October 1, 2010

Both Nielsen and Kantar Retail have released their holiday forecasts, and neither prediction is likely to unleash much joy in malls around America.

"We expect consumers to shop, but we think they will be subdued, restrained, and really mindful," James Russo, VP/global consumer insights at the Nielsen Company, tells Marketing Daily. "Employment issues, ongoing pressures on the housing market, and low consumer confidence are reflected in their spending."

Nielsen is predicting consumer holiday spending to come in flat at about $89 billion, with flat to declining unit sales, down 0.15%. And it expects consumers to spend more online and less in mass merchandiser stores, with shopping in supercenter, club, grocery, toy, book and office supply stores about the same.

What will buck the trend, he says, is technology, including smartphones, e-readers, and computers. "That all plays into this new idea of value, which consumers have been true to throughout the recession. Often, people think it's about price, but it's not; it's about benefits and price. These tech products are worth the money to consumers because they somehow make life easier, better, or more productive." Because of that, he says, sales of tech and electronics may be one of the season's upside surprises.

Kantar Retail is forecasting growth of 2.5%, compared with 0.5% growth in 2009, for the holiday fourth quarter. (The prediction includes all retailing except auto, food and drug channels.) "Prices and uncertainty will weigh heavily on the holiday outlook," Frank Badillo, Kantar's senior economist, said in the company's webcast -- with retailers becoming increasingly promotional, continually lowering prices as the season wears on.

"This price cutting, due to weakness in job market, is going to take its toll on sales gains," he says. "Consumers are being careful; people got ahead of themselves in expectations about the recovery."