What looked to be a red-hot start to the holiday season for retailers now appears to be ending on a less festive note, and Wall Street is freaking out.

Shares of the biggest retailers around have crashed in the final few trading days before Christmas. The SPDR S&P Retail ETF (XRT) - Get Report , which counts Walmart (WMT) - Get Report , Costco (COST) - Get Report and Ulta Salon (ULTA) - Get Report as a few of its top holdings, has plunged 3.1% in the past five sessions compared to a relatively unchanged S&P 500. Some of individual stock declines have been more pronounced. Discounters Target (TGT) - Get Report and Sears Holdings Corp. (SHLD) have nosedived 4.8% and 6.7%, respectively. Even electronics retailer Best Buy (BBY) - Get Report , which has seen its stock surge 48% this year amid an impressive turnaround, has lost 4.8% in the last five days.

The selling pressure has also swept to apparel names, with Abercrombie & Fitch (ANF) - Get Report losing 9.9% and Gap (GPS) - Get Report cratering 6.7%. Department stores have been particularly hard hit during the recent sell-off, too. Macy's (M) - Get Report and J.C. Penney's (JCP) - Get Report shares have fallen 9.6% and and 5.8%, respectively. 

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To be sure, the market has several good reasons to be dumping retail stocks right now. Chief among them is that new data has suggested consumers put the brakes on spending in December after snapping up amazing deals during Black Friday. Dollar sales in the first six weeks of the 2016 holiday shopping season were 4% lower compared with the prior year, according to NPD Group. In week six of the shopping season, sales declined 5% alone, led by a 9% fall in sales of toys.

Meanwhile, Finish Line (FINL) and Bed Bath & Beyond (BBBY) - Get Report both saw their stocks crushed this week due to unexpectedly poor third quarter results that only served to stoke concern on the holidays. 

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A big screen TV selling for a big discount at a Best Buy December

"Traffic to bricks-and-mortar retail not looking so great," MKM Partners analyst Patrick McKeever said. "Our overall impression is that the late arrival of seasonal cold weather and the November 8 presidential election have done little to change the sluggish traffic trend that has been in place for some time now," he added. 

And with sales trends being weak, retailers have remained in full-on discount mode to try and sell off inventory ahead of new product arrivals in January. Couple that with excessive promotions for Black Friday and Cyber Week, and there is real concern on how the bottom lines of retailers have shaped up for the fourth quarter. 

"The holiday lull of week six is deeper than retailers want, but they drove it with deeper and deeper discounts," said NPD Group Chief Industry Analyst Marshal Cohen. "This year's trend clearly demonstrates how extreme promotions, now most noticeable in toys and electronics, are steering retail off the path of growth."

Not all is doom and gloom out there in retail, however, despite the market currently believing otherwise. 

Online sales from Nov. 1 to Dec. 20 increased 10.7% to $79.2 billion, according to Adobe. "We expect the holiday season will come in at our predicted $91.6 billion in sales -- however, if we continue to see higher than expected growth, it may surpass our prediction," said Tamara Gaffney, Principal Analyst and Director at Adobe Digital Insights.

"We had a great holiday season -- we continue to see tremendous growth online, for example," Nike's (NKE) - Get Report Chief Financial Officer Andy Campion told analysts on a Dec. 20 conference call.