Retail's Holiday Story Faces an Unhappy Ending

The 0.3% growth in same-store sales reported by Instinet Research was the lowest growth rate recorded this month, following 1.1% growth in the first week of December and 0.8% growth last week. To date, comparable-store sales in December have grown just 0.8%, Instinet reported. Retailers surveyed by the company had expected comparable-store sales to grow by 2.1% over last December.

Consumer worries about the economy and job security likely caused depressed sales, Instinet said in the report.

The success Wal-Mart has reported with sales of seasonal items in recent weeks indicates that consumers are waiting until the last minute to buy Christmas items, UBS Warburg analyst Linda Kristiansen said in a research report.

"This gives hope to some retailers that the final few days before Christmas will see a flurry of late shopping activity. However, our outlook remains for a sustained slowdown to persist through the rest of the holiday season and through the first half of next year," Kristiansen wrote.

One continuing bright spot in the holiday season has been online sales. Consumers spent $1.4 billion online last week in non-travel and non-auction goods and services, according to a report released Tuesday by ComScore Networks. That was up 18% from the week before Christmas last year.

Despite the heady growth, even online sales have been somewhat disappointing. ComScore had projected that fourth-quarter online spending, excluding that on travel and auction sites, would grow 27% over the same period last year to $13.8 billion. To date, consumers have spent $12.1 billion online, excluding travel and auction sales, up $9.7 billion, or 25%, from the same period last year.

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