Holiday retails sales may have been even worse than expected. It is hard to think why that would be a surprise. Consumer confidence numbers for December hit an all-time low. How does the retail industry get people that depressed to shop?

According to Bloomberg, "Holiday sales probably decreased 2.3 percent and traffic dropped 16 percent during November and December, ShopperTrak RCT Corp. estimated."

The numbers are misleading and may make people think that the holidays were not so bad for stores. After all, a drop of 2% can't be that bad. That figure does not take into account the fact that many chains and individual stores cut prices over 50%. The potential profit on the items which were cut that much may have disappeared. As a matter of fact, some companies probably took losses on parts of their inventories so they would not have items on their shelves that they could not sell at all after the first of the year.

The other issue is that while sales may have dropped 2.3% across the industry, that number was significantly worse at some chains. According to data from ChangeWave, consumers planned to make drastic cuts in spending at Sears (NASDAQ:SHLD), Macy's (NYSE:M), and Bed, Bath & Beyond (NASDAQ:BBBY). In other words, all retailers are not created equal. Some will show large losses for the fourth quarter, and are more likely to close stores and cut staff.

Other than that, everything was fine.

Douglas A. McIntyre is an editor at 247wallst.com.