Retailers say the world economic meltdown will see them facing the toughest Christmas period since the Asian financial crisis of 1997.
Cameron Brewer from the Newmarket Business Association says retailers will be advertising agressively in the lead-up to Christmas, and fiercely competing with other businesses to attract customers through special deals.
A Research New Zealand poll showed 45% of respondents planned to spend less this Christmas, and 46% about the same as last year.
Mr Brewer believes people will spend the same amount on Christmas gifts as in previous years, but says the nature of the gifts is likely to change, to more practical presents.
John Albertson from the New Zealand Retailers Association says more money has come into households in recent weeks through tax relief and falling petrol prices and mortgage interest rates, and he hopes that will translate to Christmas sales.
Mr Albertson says people are likely to leave their shopping later this year, and predicts turnover will pick up very close to Christmas.
Statistics New Zealand figures released on Friday showed electronic retail card sales rose 0.5% in October, to $3.8 billion, due to higher spending on durable goods and clothing.
