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A naughty or nice Christmas at stores? Depends whom you ask

Betsie Van Der Meer | Taxi | Getty Images

Bells will be ringing, but will cash registers?

Retailers and analysts are divided on whether shoppers' spending will be naughty or nice this year.

"Anyone in retail will tell you—you're never confident about the holiday season until it's over," VF Corp. CEO Eric Wiseman said at the WWD Summit in New York late last month.

And there's less time to get it right this year. The span between Thanksgiving and Christmas—the traditional holiday shopping season—is the shortest since 2002 and six days shorter than last year.

Opinions are split on whether the abbreviated period simply will compress people's purchasing time or hurt total spending. But one thing is sure: The pressure is on for shoppers and retailers.

The naughty and the nice

Wal-Mart U.S. CEO Bill Simon told reporters on a conference call last week predicting consumer intention is difficult because of the marketplace's headwinds and tailwinds—some of which haven't been seen in combination before.

Consumers are paying more in payroll taxes and anticipating higher health-care costs, and they lack confidence in Washington lawmakers. Add continued uneasiness about the job market and sluggish economic growth, and Christmas looks fit for a Grinch.

(Read more: Will consumers spend cash saved on cheaper gas?)

Then again, competition for shopper dollars is so intense that retailers are offering some of the best promotions in years this holiday season.

Consumers also have been paying down their household debt to near record-low levels, but recent figures from the Federal Reserve Bank of New York showed a rise in debt, the first in nearly five years, suggesting that people may be willing to charge more.

Layer on factors such as the growth in online shopping, rising home values, a stock market that continues to hit new highs and gas prices at their lowest holiday levels in four years, and a case could be made for a jolly holiday.

So which will win out?

The National Retail Federation forecasts that total holiday sales will rise 3.9 percent from last year, to $602.1 billion. That's just slightly more than 2012's 3.5 percent growth from the 2011 holiday period.

Other forecasts for holiday sales are more optimistic, including Alix Partners' projection of a jump of between 4.1 percent and 4.9 percent from 2012, and Deloitte's estimate of 4 percent to 4.5 percent growth.

(Read more: These retailers pushing envelope on Black Friday)

While the vast majority of purchases will be made in-store, many people are turning to the Internet to help them check off items on their shopping lists. Shop.org, part of the National Retail Federation, estimates that November and December online sales will increase 13 percent to 15 percent over last year, to $82 billion. The more shoppers go to the Web, the less they frequent physical locations.

ShopperTrak, which measures retail traffic in more than 60,000 locations worldwide, projects that retail store traffic will be down 1.4 percent from 2012. Store traffic fell 2.5 percent last holiday season from 2011.

However, many of these holiday forecasts were issued in September and October. According to a new Gallup survey of more than 1,000 consumers, the average holiday spending prediction is coming in $82 lower than it was in October, marking the lowest expectation level in four years.

Wall Street's winners and losers

Citigroup expects holiday sales to be soft. It forecast retailers' fourth-quarter same-store sales to improve just 2.1 percent over 2012 including Wal-Mart but up 4.1 percent without the world's largest retailer.

Noting that the 10-year average growth rate in holiday sales is 3.3 percent, Citi expects consumers to trim self-giving and prioritize value as they have smaller budgets this year. Its top picks this season are Dollar General, Macy's and Wal-Mart.

In a note to investors, KeyBanc described its holiday expectations as "generally cautious, with a hint of optimism." Analyst Edward Yruma said high-end names will fare best and suggested that Tiffany, Nordstrom and Lululemon could be among the winners.

(Read more: The race to muscle Lululemon out of its turf)

Morgan Stanley predicts the weakest holiday season since 2008, however, estimating growth of just 1.6 percent for apparel retailers.

Retailers' guidance

Third-quarter earnings and fourth-quarter forecasts have been mixed, with some retailers issuing optimistic commentary on the holiday period while others remain cautious.

Macy's reported a better-than-expected third quarter last week, and executives had encouraging holiday guidance.

In the department store's earnings release, CEO Terry Lundgren said "our business improved during the quarter, with particular strength in October, so we are entering the fourth quarter with confidence." On the earnings conference call, Macy's CFO Karen Hoguet said, "We are very excited about what we see for the holiday season."

(Read more: Forget Thanksgiving—let's shop!)

Wal-Mart is not inspiring confidence with its holiday season forecasts, though. The discount retailer lowered earnings expectations, saying that same-store sales will be flat for U.S. locations in the fourth quarter.

In the company's earnings release, CEO Mike Duke said, "The retail environment, both in stores and online, remains competitive," but "there is no doubt that [Wal-Mart] plans to win for our customers and shareholders throughout the holidays."

Midtier, off-mall department store Kohl's also lowered expectations for its holiday sales and profit. In its earnings release, CEO Kevin Mansell said, "As we enter the holiday season, we believe we are well-positioned from a merchandise content and inventory perspective to gain market share."

Turkey, football ... shopping

No matter how the holiday shapes up. Retailers have been looking for every opportunity to coax consumers to spend. Efforts to boost outlays, which started with Kmart's airing what many consider the earliest holiday ad ever, won't let up.

What began as an experiment several years ago to increase the Black Friday shopping period now appears to be a tradition. Retailers are opening their doors earlier every year, offering doorbuster deals to the millions of shoppers who show up on Thanksgiving. The National Retail Federation predicts 33 million people will hit the stores on that day.

Kmart (part of Sears Holdings) will be first out of the gate, opening its stores at 6 a.m. Toys R Us will open at 5 p.m., followed by Best Buy at 6 p.m. While many Walmart locations are open 24 hours, the world's largest retailer will begin offering special deals at 6 p.m. Target, J.C. Penney, Kohl's, Macy's and Sears will open at 8 p.m. Some Gap, Old Navy and Banana Republic locations will be open at various times on Thanksgiving Day as well.

But not every retailer wants to join the turkey day shopping tradition. Dillard's, Costco, BJ's Wholesale Club, Saks, Lord & Taylor, Nordstrom and GameStop will be closed Thanksgiving. RadioShack also said most of its locations will remain closed.

—By CNBC's Courtney Reagan. Follow her on Twitter @CourtReagan.

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