Cash is the reason for season

Now that the Christmas trees, menorah decorations and oversized tinsel snowflakes have been taken down and the annual holiday spending orgy is little more than a memory, merchants can sit back and review their fourth-quarter sales.

Total US retail sales in November and December of last year were expected to increase 6 percent in 2005, according to the National Retail Federation (NRF), a retail trade group. At that rate, consumers would have spent $439.5 billion (€360 billion) during the Thanksgiving, Hanukkah, Christmas and Kwanzaa shopping seasons. While that prediction for growth is down from the 6.7 percent seen last year, it is still the second-highest bump since an 8.3 percent gain in 1999.

Another trade group, the International Council of Shopping Centers, only put the holiday sales growth for US chain retailers at 3.5 percent for November and December, up from a 2.3 percent increase in 2004. Performance at retail chains seemed to vary, something industrywatchers chalked up to increasingly selective consumers.

The country's largest retailer, Wal-Mart, said in January that it saw the smallest December sales bump in five years, a situation that may affect fourth-quarter profits. Department store Sears, clothing company The Gap and discount retailer Kohl's all came in with below-projected sales as well.

But other retailers—including those focused on luxury goods, like Nordstrom, and the teen market segment, like Abercrombie and Fitch— seemed to be on-track to beat sales estimates. Discount chain Target also posted strong sales for the holidays.

The consumer electronics sector was also a big winner—big box electronics chains Best Buy and Circuit City both posted strong gains as consumers snapped up iPods and flat-panel television sets.

But, perhaps most worrying to traditional brick-and-mortar retailers, were the NRF projections regarding online hoilday sales: Internet-based purchases were expected to surpass $170 billion in 2005, up from $141 billion in 2004.