Holiday Sales Didn't Wow -- or Wilt

In my last column, I told you the holiday shopping season needed a killer week before Christmas to make the 2006 holiday shopping season a gangbuster. While that didn't happen on a wholesale level, all told sales weren't that bad at all. So if you're in retail stocks right now, it's time to hold on and wait for the dust to settle. I believe that when it clears, retail's 2007 prospects will prove positive.

First, the ho-hum news. I took numerous shopping trips after Christmas, and my feelings about the final throes of the holiday shopping season are mixed.

For a broad sampling of retailers -- apparel sellers, music shops, department stores -- I found many of the shelves were empty or seriously depleted. While I liked the fact that retailers were moving product, the heavy promotions -- which looked last-minute to me -- indicated that many retailers were slashing and burning just to move inventory.

Sure, that's a great method of making way for new merchandise, but it kills margins. And we all know that lousy margins lead to lousy profits.

From a numbers perspective, sales at chain-store retailers open at least a year were up 3.1% for December compared with the year-ago period, according to the International Council of Shopping Centers. There's no doubt about it: Those aren't stellar numbers by any stretch of the imagination.

And while shoppers' apparently boundless appetite for electronic gadgets and TVs -- including flat-screen, high-definition television sets and Nintendo's Wii game console -- breathed life into sales, buyers weren't able to improve lousy sales of cold weather apparel and jewelry. After all, the unseasonably warm weather we've been having doesn't exactly put shoppers in the mood to buy winter coats.

Now the good news:

1. According to ShopperTrak RCT, retail sales for the week ended Dec. 30 increased a solid 7.6% compared with last year. Those numbers are impressive, no doubt about it. Plus, "Super Saturday" -- Dec. 23 -- showed up as a massive shopping day. All told, a staggering $8.72 billion in spending rang on retailers' registers that day, second only to Black Friday's $8.96 billion.

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Wayne Burritt is president and director of equity research for Burritt Research, which operates BurrittResearch.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Burritt appreciates your feedback; click here to send him an email.