U.S. chain store sales ticked higher in the first week of 2006 as consumers began the process of redeeming gift cards they received over the holidays, according to a report on Tuesday.

Sales rose 0.1 percent in the week ended January 7 after falling 0.8 percent in the prior week, according to the report, which is produced by the International Council of Shopping Centers and UBS Securities LLC (UBS).

"During the month of January, about 40 percent of gift cards are redeemed and that is exactly what consumers began to do this past week," said Michael P. Niemira, ICSC's chief economist and director of research. "As a result, chain stores saw their sales rise slightly.

Compared with the same week a year ago, sales were up 3.7 percent, above the 2.9 percent growth in the prior week.

Niemira said that for all of January, ICSC expects chain store sales to rise by 3.0 percent to 3.5 percent, on a year-over-year basi."

The ICSC-UBS Weekly Chain Store Sales Snapshot is compiled from a group of major discount, department and chain stores across the country that report their weekly results.