US retail sales are poised to grow by only 3.4% in 2013, thanks to fragile consumer confidence and economic uncertainty, according to the National Retail Federation (NRF).

The prediction follows a 4.2% increase in retail revenues in 2012, culminating in holiday sales rising only 3% as politicians wrestled with the impending “fiscal cliff” crisis.

“What we witnessed during the holiday season is an indication of what we are likely to see in 2013,” said Matthew Shay, NRF president and CEO.

“Consumers read troubling economic headlines every day and look at their bottom lines at the end of the month, and they don’t like what they see.”

Predicting online sales increasing 9-12% during the year, the NRF said its forecasts were based on a number of factors, including steady unemployment rates, rising taxes, an improving housing sector, controlled inflation and slowly improving consumer confidence.

“Retailers will compensate for the drag on household spending this year by managing inventories and focusing on providing value for their shoppers through unique promotions in stores and online, and exclusive product lines,” Shay added.