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Did the Grinch Steal the Holiday Shopping Season?

Despite some reports suggesting holiday sales will be the worst since 2008, Matthew Shay, president of the National Retail Federation, told CNBC he's still predicting a 4.1 percent increase.

"We're still pretty optimistic it's going to be a solid year," Shay said Wednesday on "Squawk on the Street." "We're still going to have year-over-year growth" of 4.1 percent. But that is down from 5.6 percent growth last year.

The MasterCard Advisors SpendingPulse, which tracks holiday spending, said Tuesday that sales in the two months before Christmas increased 0.7 percent, compared to last year. Many analysts had expected holiday sales to grow 3 to 4 percent.

Shay said the last time the numbers were as low as the SpendingPulse data is suggesting was 2008 during the financial crisis. The NRF executive doesn't expect to see numbers like that again this year. He also said that the MasterCard survey is limited and doesn't cover online sales.

The last week of the year could be critical for retailers. Shay said the holiday season started off strongly and if it ends well, sales growth will end up in the 3.5 percent to 4 percent range, especially with the push from online sales.

Gift cards could also give retailers a boost as many consumers who use a gift card often spend more than the face value of the card, Shay noted.

(Read More: Boldest Predictions 2013)

Despite the continued optimism, Shay acknowledged that consumer confidence had weakened heading into the holidays following super storm Sandy and the ongoing debate about the "fiscal cliff" of tax hikes and spending cuts that could go into effect early next year.

"We've been saying from the beginning this is a cautious and careful consumer, and it wouldn't take much to knock us off this nice progression," of consumer spending, Shay said.

-By CNBC's Justin Menza

Questions? Comments? Email us at consumernation@cnbc.com.

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