Retail sales in America rose 2.9% last week, capping a modest holiday season as discounters benefited from price cuts and mall stores struggled.

Sales for the two-month holiday period remain “on track for a moderate increase” of 3% to 3.5%, the International Council of Shopping Centers said yesterday. Malls and shopping centers reported a 4.4% December sales gain and said sales fell 2% last week, according to ShopperTrak RCT Corporation.

Retailers including Federated Department Stores’ Macy’s cut prices as much as 75% to clear inventory last week and merchants such as Kohl’s stocked spring items to try to bolster sales. The increased use of gift cards has shifted some sales until after Christmas, a Citigroup analyst, Deborah Weinswig, wrote in a report December 29.

“Consumers are definitely pushing their shopping later,” said Shireen Eddleblute, who helps manage more than $26 billion at Minneapolis-based Voyageur Asset Management LLC, including about 2.1 million Kohl’s shares. As retailers keep inventory low and bring in spring items earlier, “by the time those gift cards are used, there’s not going to be any clearance items to buy,” she said.

Last week’s gain was the smallest of the holiday season, the ICSC said. Comparable sales fell less than 1% from the previous week. The New York-based ICSC and many American retailers will issue December sales results tomorrow.

The group compiles weekly chain store sales data with UBS Securities LLC. Chicago-based ShopperTrak measures traffic in shopping centers and malls using more than 40,000 video devices.

Its figures exclude discount stores such as Wal-Mart Stores, which started the holidays with discounts as early as November 1.

Retail sales paid for with Visa credit and debit cards rose 15% last week to $8.2 billion, boosted by 19% increases at department stores and consumer electronics and bookstores, Visa USA said in a statement yesterday. Total sales on Visa cards from October 31 to January 1 rose 18%.

Shares of Wal-Mart rose 7 cents to $46.30 at 1:18 p.m. in New York Stock Exchange trading. Federated gained 53 cents to $68.75. The Standard & Poor’s 500 Retailing Index rose 4.2% in the last three months of 2005, the smallest fourth-quarter gain in three years.

The National Retail Federation expects total November and December sales to increase about 6%. The Washington-based trade organization raised its forecast November 22 from 5% after strong sales before the Thanksgiving holiday.

The last week of December accounted for the smallest percentage of holiday-season sales in 2003 and 2004, according to ICSC. Sales in the last week of the 2004 holiday season rose 4.6%, the biggest gain of the period.