Retailers may be in for a blue Christmas this year as worries about soaring energy prices, consumers' cost-consciousness and a warmer December than last year make for lackluster holiday sales, retail analysts said.

Americans will still be hitting the malls during the key holiday shopping period, but not with the force that they did last year, experts said at a Merrill Lynch (MER) retail conference on Thursday.

For apparel retailers this holiday season, "we see some opportunities, but we definitely see more challenges than opportunities," Merrill Lynch retail analyst Mark Friedman said.

Hot fashion trends like brooches and blazers could help boost sales, but that may not be enough, Friedman added.

Sales at apparel and accessory stores will likely rise a nominal 4 percent in November and December, the key holiday shopping months, down from a 5.9 percent gain in the same period of 2003, Friedman said.

Christmas sales at general merchandisers are expected to rise just 4.9 percent, below last year's 5.6 percent and below the 10-year average of a 5.8-percent gain, Merrill Lynch analyst Daniel Barry said.

The holiday shopping season, which gets its unofficial start on the Friday after Thanksgiving, is critical for retailers, many of whom do a significant chunk of their business for the year during that period.

This year, Mother Nature may not cooperate with the industry. Autumn's first real drop in temperatures came in October this year, and November is expected to be cooler, as well, which could fuel buying. Warmer weather during the key post-Thanksgiving period, however, may crimp sales of seasonal items later, Merrill Lynch analysts said.

In the end, though, the weather impact may not be that significant, said Marshal Cohen, chief industry analyst at market research firm The NPD Group (search). "Are you really going to cross people off your list because of bad weather?"

While cooler weather may have helped pump up sales of winter items during October, it has also prompted some Americans to turn up their thermostats. Consumers may decide to rein in their spending once their energy bill arrives, Friedman said. "Their October bill may give them a scare."

Heating oil prices surged to record highs this week and gasoline prices have been nudging closer to record levels.

In a study by NPD Group, 42 percent of those polled said the price of gasoline will impact spending.

A sluggish job market has helped make consumers more cautious, and many shoppers will be looking for bargains this holiday season. While that will likely help warehouse clubs like BJ's Wholesale Club Inc. (BJ) and Costco Wholesale Corp. (COST), it will be a challenge for other retailers, analysts said.

About a third of the consumers polled by The NPD Group said they would wait for items to go on sale before making purchases, Cohen said.

Shoppers may cut back on purchases they make for themselves during the holidays, Friedman said. "Consumers still may buy, but that incremental self-purchase may be smaller than last year. This year, it may be a cashmere scarf instead of a sweater, or something on sale."

On the bright side, demand for luxury goods is strong and is likely to remain so, Merrill analysts said.

In the apparel sector, the trend toward bright colors like purple, pink and red and toward items with a luxury spin, like fur and velvet, will help drive sales, Liz Claiborne (LIZ) Vice President and Group Creative Director Debbie Martin said.

"It will be a respectable season, but not a great season," Friedman said.