The Financial Post reports in its Monday edition that Santa is hearing Christmas wishes from children at malls adorned in holiday regalia, but among the usual holiday trappings are new factors that could shake up the busiest shopping season of the year: inflation, and high interest rates. A Canadian Press dispatch to the Post says that the combined pressures, with prices up substantially in the last few years and the policy rate at 5 per cent, threaten to weigh on shoppers' willingness to spend and thus, retailers' profits. "This is going to be a very challenging holiday shopping season for retailers because the consumer is worried," said Kostya Polyakov at KPMG in Canada. "The consumer is feeling that everything is expensive, the consumer is feeling that they don't have enough money for non-discretionary spending." An on-line survey from KPMG conducted between Oct. 20 and Nov. 2 found 83 per cent of the 1,507 Canadians questioned are being more cautious about what they are spending money on this year compared with last year. Seventy per cent of those surveyed said they do not plan on spending as much on discretionary items as they did in previous years, and 66 per cent indicated they plan to only spend on essentials.