Retail Merriment Reined In

At the same time, he says he did not notice as many Black Friday promotions for Best Buy and Circuit City continuing through the weekend, and that might help them in the end.

"Margins won't be down dramatically but they're going to be weak," Weinhart predicts.

Discount chains like Wal-Mart (WMT) and Target could also come out as winners this holiday. A survey by the National Retail Federation showed that 55.1% of shoppers visited discount stores on Black Friday, up from 49.6% last year.

Weinhart says that may take away from Best Buy and Circuit City, especially as shoppers become more price-conscious amid the housing slump and a weakening economy.

"Given the consumer's focus on price, and the lower price points for mass-market adoption, that plays to a discount chain like Wal-Mart and Target," he says.

Now that the pivotal Black Friday has passed, retailers are entering the second stage of the holiday season, when they must decide how promotional to be.

Monday brought another overhyped shopping event dubbed "Cyber Monday" for its surge in online sales, and retailers ranging from J.C. Penney (JCP) to Home Depot (HD) have broken out special discounts for Internet purchases. "Cyber Monday" is expected to generate more than $700 million in sales, according to Internet research firm ComScore.

Cohen says that some chains might see Black Friday's high volume of traffic as a promise of what's to come. But he adds that it would be a mistake for them to overlook the fact that many shoppers turned out to the stores for no other reason than the promotions. Some may have even completed their holiday purchases and won't be returning for the rest of the season, regardless of any new sales.

"It's going to get trickier as we get closer to the holidays," Cohen says.

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