According to the International Council of Shopping Centers (ICSC) and Goldman Sachs, the week before Christmas was a solid one for retail sales. Compared to a year earlier, retail sales increased 2.3% as last-minute shoppers flocked to chain stores. This increase is impressive, but it starts to look a bit weaker when taken in a week-over-week context. Sales increased 0.4% when compared to a week earlier.

When looking at the week-over-week increase, which some call less than impressive, it's important to take into account the massive winter storm that battered the East Coast. This storm had to have an impact on the amount of shoppers trudging out to retail outlets. Despite that, the percentage of sales increased still.

For retailers, it doesn't get bigger than the holiday season, but even a raving success may not be enough to push an uneasy economy on the road to recovery. Basically, the retail sector has to do well to keep people from worrying more, but we'll all have to wait a while for some economic bliss. According to an MSNBC report, gift sales aren't as powerful as many believe.

So, here are five reasons why a great visit from Santa won't be enough to kick-start the economy:

Here, in Cincinnati, we have about an inch of snow on the ground this morning. However, the East Coast is getting hammered and officials have advised residents to stay inside. With 20 inches of snow falling from the sky and piling up, not only are residents of the East Coast feeling the pinch, but it is possible retailers do as well. If denizens of the coast pay attention to the warnings, it could put a major crimp in last-minute Christmas shopping.

Retailer Target (TGT) has announced that it will open an hour earlier and remain open until midnight in Virginia, Maryland, D.C., New Jersey, Delaware, and Connecticut (along with some stores in Pennsylvania, New York, and Massachusetts) beginning today through Wednesday. The retailer announced this plan in order to give its patrons "more opportunity to make all their holiday purchases."

It wouldn't reveal the number, but Amazon (AMZN) did announce that it realized record sales for its Kindle e-reader this month. And, there's still the rest of the month to go, including the run-up to Christmas. Just as the battle for e-reader market share began to flare up, it already seems to be over.

This year, Sony (SNE) released a new e-reader, and Barnes & Noble (BKS) entered the market with its Nook device. Both posted early successes, which quickly became problems. The two companies sold out of inventory and won't be able to ship new orders until the new year.

Everybody's back at their desks today, but a majority will be skirting as much work as possible and doing a little stealth shopping when the boss isn't looking. I know that I was deluged with myriad emails from various retailers extolling the virtues of their own "Cyber Monday" sales.

Cyber Monday is the day that you can get free shipping, amazing percentages off, or extra goodies simply for shopping from the comfort of your computer. Remember, many analysts believe that Cyber Monday is nothing more than hype and not a real phenomenon (see Colin Sebastian's comments in the seventh paragraph). That said, which retailers could cash in today?

No, don't expect to see windmills and solar panels -- consumers are leaning toward a different kind of green this holiday season: cash. Rather than hit their credit cards, shoppers will only be spending money they have (and can see and touch). Seventy-one percent of consumers are looking to cash and debit cards as their primary form of payment for holiday shopping this year, which the National Retail Foundation pegs as the highest level since 2005.

This could be a problem for the retailers.

Sure, you'd think that the merchant fees on credit cards make cash more attractive to the sellers. But, Ellen Davis, a spokesperson for the NRF, says that most retailers have found they can talk credit card buyers into up-sells more easily. That leads to a bigger basket size and more revenue. Done successfully, it should comfortably absorb the impact of merchant fees. James Roberts, a marketing professor at Baylor University, adds that using plastic makes consumers more likely to buy at all, let alone more.

Okay, so we all know retailers are looking for every holiday edge this holiday season. Consumer spending's been down, and the sprint to Christmas offers the last chance to pump up those Q4 numbers. They are trying out new ways to reach and engage shoppers, particularly via social media. But, the most effective way to bring new customers into the fold -- and keep them around for a while -- may be to pick up the shipping tab. It's pretty old fashioned, but it's best by test.

Once considered a bonus, a special effort, free shipping isn't really optional any more. If a shopper has to pay for shipping from one retailer, he may move on, knowing that plenty of others aren't charging for it. Rebecca Lieb, vice president at Econsultancy, a digital marketing news publisher, notes, "You're delighted the first time you get free shipping, but you expect it the second time."

And, free shipping shouldn't come with any strings attached, according to Shop.org's eHoliday Study (Shop.org is the e-commerce division of the National Retail Federation). Five years ago, 25% of retailers didn't charge for shipping during the busiest shopping day of the year. This year, however, 57% are planning not to hit their customers up for the extra cash, making this cost just another expense associated with running the business during the holiday season.

If Amazon (AMZN) was comfortable with its spot atop the e-reader market, it just got a wakeup call from Barnes & Noble (BKS). The brick-and-mortar book retailer's e-reader, the Nook, which hasn't even hit stores yet, is in pre-order nirvana right now. The first run for the Nook occurred at the end of October (the product was introduced on October 20). These buyers were told the reader would ship on November 30. High demand resulted in backorders, so the next wave of pre-orders was scheduled to ship on December 7. Now, a third group will have to wait until December 11.

This product is on fire, and it still isn't even on shelves yet.

Mary Ellen Keating, a spokeswoman for Barnes & Noble wouldn't reveal how many of these devices have been pre-ordered, but she did say, "Demand for the product in our stores and online has surpassed our expectations." She also noted, "We are working hard to meet demand for the holidays."

America's second-largest retailer, Target (NYSE: TGT), announced second-quarter earnings this morning.

The discount retailer saw second-quarter earnings drop 6.4%, which was less than what the Street expected. For the quarter, Target earned 79 cents per share; down three cents from a year earlier but far better than the expected 66 cents per share.

Target was hurt by wary consumers who were less than willing to part with money on apparel and other "nonessential items." Target's CEO attributed the strong results to "very strong operating margin in our retail segment, and credit card segment performance in line with expectations."

Retail giant Kohl's (NYSE: KSS) reported second-quarter earnings this morning, saying they fell 3% due to higher expenses. Despite the drop, KSS managed to top expectations with the latest results.

KSS pulled in 75 cents per share for the quarter, a penny better than what the Street expected. Quarterly sales increased 2% in the quarter, rising to $3.81 billion and beating expectations of $3.79 billion in sales, but unfortunately, same-store sales dropped 2.3%. Looking ahead, KSS forecast full-year earnings of $2.59 to $2.70 per share, up a great deal from its earlier forecast of $2.19 to $2.42 per share. Still, the upper end of the new forecast range is still eight cents shy of the Street's expectations.

With two young children I am reacquainting myself with the holiday cartoon classics. One of my favorites is A Charlie Brown Christmas, where Charlie is ridiculed for the half-dead tree with a few scraggly branches that he picks out a for the holiday production.

We are all living the Charlie Brown Christmas this year, and making due with less. Most people are cutting back on their holiday shopping as they adjust to the slowing economy and higher unemployment.

Frankly, it is a nice change of pace. That said, our reduced spending is, in a sad way, making matters worse.

Companies are retreating en masse, with many reducing or eliminating guidance. It's brutal out there.

The latest victim is video game maker Electronic Arts (NASDAQ: ERTS).

Although there is no must-have buy this season, video games were thought to be attractive for those looking for cheap entertainment. Apparently, that's not the case.

Yesterday, ERTS issued a warning to investors. The company said it now expects to miss already reduced guidance for the fiscal year ending in March. Things have gotten so bad that ERTS is not offering any specifics.

December is a critical month for retailers - the holiday season is the busiest shopping time, and a large chunk of bottom-line profits is booked in the final month of the calendar year. In 2006, December sales accounted for about 15% of all sales for the retailing sector. But December 2007, as many were predicting, may be one of the worst Decembers this decade.

Tomorrow, same-store sales for this critical month will hit the Street and the International Council of Shopping Centers (ICSC) is expecting an overall gain of 1% among stores open at least a year. This is below the ICSC's earlier estimate of 1.5% and compares to a year-ago jump of 3.3%. If this estimate is on the nose, it will be the sector's worst December since 2002.

There are many reasons that the holiday-shopping season was a slow one: rising food and fuel costs, the credit market breakdown, continued housing woes. And because of all these reasons, many retailers were forced to offer sale prices and additional incentives to lure cautious customers into the stores. These discounts obviously pressured the bottom line.

It's easy for me to preach "shop local" from my blogger's perch in Manhattan. While many companies are headquartered here in New York, boutiques, bodegas and mom & pop shops rule this roost. Aside from Starbucks (NASDAQ: SBUX) -- c'mon, they're ubiquitous -- and maybe Rite Aid (NYSE: RAD), I'd have to hike a mile or so to reach the nearest publicly traded business.

But committing my Christmas dollars to local businesses is a tradition I picked up from my ex back in North Carolina, and I think I'm all the better for it -- and all the better served.

For starters, you're far more likely to be wowed with the service from a small shop. At a local business, often you deal directly with the shop owners, who have an undeniable stake in your transaction. Because their equity and livelihood depend upon the repeat business of customers like yourself, you're worth more to the small business owner than the customer queued up at a crowded cash register at Circuit City (NYSE: CC) or Sears (NASDAQ: SHLD), and that value is evident in the transaction.

As some of you have probably already noticed, this year's holiday shopping season has started a little earlier than usual. For those of you who have not noticed the early arrival of the season, don't worry, you aren't blind, you are just proof that retailers have been successful in their attempt to start the holiday shopping without anyone noticing.

Typically, we can at least expect retailers to wait until we get past Halloween to start the hard hitting marketing campaigns, but this year is a bit different. Retailers usually expect strong sales leading up to the holidays, but this year there are economic jitters weighing on the minds of consumers, along with fear related to the massive Chinese toy recalls that we have witnessed this year, and are likely to continue to hear about.

It was what thousands of parents of whiny kids were waiting for. Out of the blue, the Tickle-Me-Elmo floodgates are open and (among others) Wal-Mart Stores, Inc. (NYSE:WMT) makes oodles of TMX Elmo dolls available on the company's web site. From an, umm, "hidden cache." According to Heather, a TMX Elmo searcher in my office, she finally discovered an Elmo available "suddenly" from Fisher Price. Another warehouse abruptly appear out of the fog in El Segundo? (Do they have fog in El Segundo?)


All at once, eBay, Inc. (NASDAQ:EBAY) listings are everywhere, 22,446 results for my search for "TMX Elmo" and not just lots of results but falling prices. When I first checked around 10:45 a.m. there were dozens of listings closing around $5 or $10 over the suggested retail price of $39.99. 20 minutes later, when I was finishing up this piece? It was more like $5 or $10 under the suggested retail price. The Spanish version was going for a ridiculously cheap $26.55. Market floodage has commenced.

When Black Friday was approaching and customers were gearing up for their long wait in line to be one of the few, the proud, the early purchasers of TMX Elmo dolls, a few less festive souls whispered of "artificial shortages" and wondered if Mattel was purposely creating a frenzy over the toys. Most parents and eBay sellers accused them of a distinct lack of holiday spirit, and oh yeah, not enough capitalism.