But will wallets be opened, not tucked under beds? Or will investors, dreaming of grand returns, be seeing red?

Just like the children in The Night Before Christmas, investors are hoping that Christmas will deliver windfalls. But opinion is divided among analysts and fund managers about the fate of retailers over the next few months.

Consumer confidence has failed to pick up after taking a dive in the lead up to the federal budget. According to the Westpac-Melbourne Institute consumer sentiment index. the number of people pessimistic about the economy has outnumbered those who are optimistic for nine straight months, the worst slump since the global financial crisis.

But there is some good news in the latest retail sales data, which show a 1.2 per cent improvement in the month of September.

A lower Australian dollar and improved online offerings should help the retailers.

"I think the platform is set for a pretty good Christmas, the run-rate of retail sales growth in September was quite encouraging and feedback on October from retailers suggests that things still remain quite healthy," Citi analyst Craig Woolford says.

One thing hanging over retailers' heads has been the prospect of a mini-budget, but it appears as though Treasurer Joe Hockey has taken it off the table, Woolford says.

"The big question that all retailers should be wrapping their heads around is what is going to entice the shopper this Christmas, what are they going to put under the Christmas tree?" Woolford says.

iPhones, game consoles ( such as the Playstation 4 and XBox One where stock was largely unavailable last year) and games are looking like the presents Santa will be delivering this year, and JB Hi-Fi is well placed to capitalise, Woolford says.

"For companies like JB Hi-Fi, our concern is the ability to maintain or sustain that momentum beyond Christmas."

That expectations are not high means any modest outperformance could benefit JB's stock price, Credit Suisse analyst Grant Saligari says.

But Motley Fool investment advisor Scott Phillips says with price deflation and threats from overseas, JB's share price may be a little too high and the outlook too optimistic.

He prefers Solomon Lew's Premier Investments, which has a chance to outperform. "The Peter Alexander and Smiggle brands, in particular, have got some fantastic growth potential here and overseas," Phillips says.

"Smiggle, the teen focus stationary business, will open 15 stores by Christmas in the UK – that's a very big market. It's got a very similar demographic, very similar household income, lots of interest in stationary, particularly from teenage girls."

Woolford agrees there are opportunities for Premier in overseas expansion, but the company's relatively high price-to-earnings ratio, around 23x, means it needs to delivery very good sales over Christmas to satisfy market expectations.

Opinion is also mixed on department store Myer. Equity Trustees head of equities Paul Kasian says are question markets over Myer given the flat sales result this week.

Shares sunk to a two-year low after first-quarter sales rose just 0.1 per cent.

"I think Myer needs to have a think about the whole way they structure their stores. They just don't seem to be hitting the mark with the consumer," Kasian says.

Credit Suisse's Saligari, who has a "buy" on Myer, says the low expectations for the department store and its low share price offer an opportunity even if sales improve only modestly.

With improvement in the housing sector, Equity Trustees' Kasian reckons Harvey Norman could capitalise on furniture sales.

"There's always a lag with housing, because you build your housing and then fill it with furniture. So there's a bit of a catch up and Harvey Norman could benefit," Kasian says.

Citi's Woolford, however, has a "sell" on Harvey Norman thanks in large part to its small share of gaming consoles, mobiles phones and timing of the retail cycle.

"In October 2013, the retail cycle started improving and the improvement was driven by housing-relating categories, so they now have a higher hurdle to jump over this Christmas," he adds.

Super Retail Group (the owner of Super Cheap Auto, Rebel Sport and Rays Outdoors), is poised for growth during and post-Christmas, Woolford says.

"They've got a good sales backdrop, good categories, because people want to participate in leisure activities, sporting activities and tinker with their cars. They've also got opportunities to improve their profit margins through direct sourcing and supply chain overhaul."