US retailers will see their slowest holiday sales growth this year since 2002, according to the National Retail Federation.

The largest US retail industry group said it expected sales in November and December, excluding fuel and motor vehicles, to rise 2.2 per cent this year to $470.4bn. The rise would mark the slowest growth since 2002 when sales rose 1.3 per cent.

Rosalind Wells, the NRF’s chief economist, said the group expected that “current financial pressures and a lack of confidence in the economy will force shoppers to be very conservative”.

“We expect consumers to be frugal this season and less willing to splurge on discretionary items.”

The NRF said it expected the crisis in the financial industry to add to strains on consumer confidence, adding to the impact of the depressed housing market, rising unemployment and high food and energy costs.

The group, whose members were supported by the federal economic stimulus tax rebates in the first half of this year, did not foresee an economic turnround until the second half of next year.

Holiday sales last year rose 3 per cent, below the NRF’s forecast of 4 per cent growth. Sales over the past decade have grown at an average annual rate of 4.3 per cent.

In a sign of the growing pressure on discretionary spending, Target, the mass discounter, has reported increased pressures on its credit card portfolio as more customers failed to pay their bills in August.

Target, whose customer base is largely middle class, is one of the few leading US retailers to retain an interest in its credit card receivables, after selling roughly half of its portfolio to JPMorgan earlier this year. It said on Monday that the rate of delinquencies – or card balances with missed payments – against receivables increased to 7.51 per cent in August from 6.99 per cent in July.

It has been losing customers to Wal-Mart, whose lower cost groceries and basics are attractive to budget-conscious households.