I was wrong about Ann Taylor Stores Corp. (ANN). Thought it might make a possible earnings trade. Well, Q3 earnings are out, and it looks like the market has given a thumbs down to my thesis. At the time of this writing, shares were off by almost 4%.

It's funny, because Ann Taylor has done so well in 2009 as a stock that one could have supposed that a wide earnings beat would serve as a catalyst for capital appreciation. The retailer made 20 cents per share on an adjusted basis. According to my earnings preview, 6 cents was the analyst number. I mean, come on, that's an example of solid performance, correct?

Target Corporation (NYSE: TGT) and Wal-Mart Stores Inc. (NYSE: WMT) will be mortal enemies this holiday season after both seeing consumers close their wallets and purses last season. Although September job losses were worse than expected, the U.S. economy continues to gain confidence, regardless of market losses this week.

What will be the weapons of choice in this season's holiday retail market? Wal-Mart will be pushing no less than 100 toys priced at $10 or below, with some hot names like "Transformers" in that mix. At the same time, Target announced the same items for $11.99. Not quite the same, is it? With Wal-Mart's research indicating that many of its shoppers start budgeting for Christmas purchases by August, that puny $2 difference does indeed make an impact on millions of consumers.

Best Buy Co. (NYSE: BBY), which recently gave a dire prediction about the state of its future sales, has decided to cut back on the amount of inventory carried in each store during this holiday season, as it weathers the consumer spending downturn caused by the current economic recession.

Many industry titans have indicated that this is the worst retail environment they've ever seen, and that list now includes Best Buy President Brian Dunn. Dunn indicated that the speed and depth of the recession caught the consumer electronics retailer off guard and by surprise. As a result, the retailer is curbing television commercials and is doing more to pump its lower prices through email and cheaper marketing methods.

Although Best Buy is now offering zero interest for 18 months on all purchases $499 and up, that's not good enough. If Best Buy really wants to get feet in the doors -- even in a recession -- it should offer no interest financing for all purchases above $19.99.

That's right, anything from the price of a new DVD on up. Trying to push sales of its recently-unveiled and overpriced Blue Label goods won't cut it. It should pull those goods until the recession has ended and re-introduce them. Customers aren't looking for products created with their opinions in mind. Right now, it's all about price.

Retail websites are becoming just as important as brick-and-mortar presences for most retailers, and this is never more apparent than during the retail holiday season. For those customers who don't wish to beat each other up while standing in 6am Black Friday lines, sitting at home ordering holiday presents over the web is the preferred shopping method.

I've written many times in the recent past about how consumer electronics retailer Best Buy, Inc. (NYSE: BBY) gets more things right than wrong. The company's merchandise presentation, helpful employees and overall shopping experience is miles ahead of competitor Circuit City Stores, Inc. (NYSE: CC) from my experience. But, how about the performance of its website? I'll admit that I've never ordered a single thing from Best Buy's website. Apparently, I am missing out there.

In a recent study of retail website performance over the recent holiday season, Best Buy was joined with bookseller Barnes & Noble, Inc. (NYSE: BKS) and outdoor retailer Cabelas, Inc. (NYSE: CAB) as having the highest reliability of all retailers in a field of 26 candidates. Other retailers monitored included the world's largest online retailer -- Amazon.com, Inc. (NASDAQ: AMZN), Wal-Mart Stores, Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT). In terms of specific website performance figures like page downloading and transaction completion speed, retailers Circuit City and Victoria's Secret ranked at the top.

With the last full shopping week before Christmas well underway, retail analysts are scrutinizing every sale at many national retailers to see how consumer spending is shaping up this holiday season amid recession fears that drove the stock market down a pretty decent chunk yesterday. Consumer electronics giant Circuit City (NYSE: CC) is set to report earnings come this Friday in what is expected to be another disastrous quarter for the retailer. Will this follow through to other retailers due to a soft holiday shopping season? With larger competitor Best Buy (NYSE: BBY) reporting Q3 numbers today, we may have quite a contrast in results come this end of this week -- or not.

Although November retail numbers were better than expected due to the full week of holiday shopping after the Black Friday shopping day, that kind of result should not be expected in December. Marshal Cohen of research firm NPD Group said that "while the November numbers make it look merry, some challenges lie ahead. Discounts work to some degree, but retailers still need generate excitement ... and there's still a lack of new products." Enough said? But I love this quote from Britt Beemer of the Americas Research Group: "I have to conclude that retailers don't try to understand today's consumer as they focus on Wall Street and their share value." I agree 100% from my end.

So, what will December retail holiday sales bring? A string of disappointments to add more fuel to consumer spending fears and an upcoming recession, or a mild reaction from Wall Street when the smoke clears on December 26th? If you own retail stocks now, be watching for results next week -- and you may not want to keep tabs on your portfolio at the same time unless you have a large stomach.

Yesterday, the guesses were lined up about this past Monday's online traffic and sales figures. Well, the traffic figures are official now, and online traffic on Cyber Monday jumped 26% over last year's levels. If consumer spending is slowing down this winter due to energy prices and credit crunches, it sure did not show this past Monday.

Hitwise, an internet traffic reporting firm, released initial figures that showed Amazon.com (NASDAQ: AMZN) rise to the top of the most-visited retail website list on Monday. It's interesting to note that Hitwise also stated that this was the third annual Cyber Monday in a row where growth was seen. Amid talk of slower holiday retail sales this year, could it be that customers are moving those purchases from the early morning hours of Black Friday to the comfortable office mouse clicking environment of the following Monday?

Hitwise recorded a 26% increase to the Hitwise 100 Retail Index this year (the top 100 retail websites) compared to November 27, 2006 levels. The largest growth areas this year on Cyber Monday were the electronics and video games categories.

Now that Black Friday and Cyber Monday are over, retailers nationwide will continue the price discounting this week (and beyond) to keep those sales pouring in all the way until the end of December. Some retailers are taking the discount versus profit line this week, as 50% off is being seen at many online outlets, which is sure to cause a profit knock at the end of the day.

Is this any surprise? Not really -- loss leaders are always used to hook consumers looking for bargains into stores (and online retailer websites) where they are either ferociously upsold more expensive products or are extensively cross-sold more products than they came looking for.

It's the savvy consumer who seeks out a good bargain and leaves with just that item (or items) that retailers don't really want. But the U.S. consumer is a savvy one indeed, and the more tactics retailers use to push non-bargain products, the more consumers shrug them off.

It's been said that there are no "must have" gift products this year. These products, based on the law of supply and demand, command premium prices. When there is a lack of that kind of product, the only recourse many retailers have is to slash prices to get customers lifting up their spending. Although the holiday shopping season this year may indeed be a large one, will any companies make significant profit? Is there a goal of selling as much as possible while making very little profit in the process?

During the first week in November, consumer confidence tumbled downward to the lowest level since Hurricane Katrina, based on reports this morning. Yes -- that is the lowest level since the summer of 2005. What changed from October? Well, never underestimate the power of the media to take situations like energy prices (oil prices) and the messy house market (foreclosures and more) and extol all the bad virtues into every nightly newscast to give the public a certain perception. It happens.

The RBC Cash Index moved from over 80 to just 64 from the October to November, with the stock market's highs in October now wearing off as the DJIA settles into the sub-14,000 rage once again.

But my my, how a few weeks can change things. Oil prices consistently nearing the $100/barrel level and with so many houses on the market (and with new credit expectations for millions of buyers) caused the confidence level to plunge.

Huge losses at Merrill Lynch and Citicorp -- tied directly to subprime mortgages -- have shaken some investors as well, although they should not. Stupid decisions by financial CEOs don't make for a shaky economy, right? But then again, consumer confidence is just that - confidence. Reality can be quite different in the end.

Well, well. The world's largest retailer has launched an apparently "secret website" that details some special offers for an "Early Black Friday" that will start pleasing shoppers the morning of November 2. The regular Wal-Mart Stores, Inc. (NYSE: WMT) Christmas Shop website is already open to the general public, but this special section is apparently available only if you know the web link to get there. Neat-o!

Examples of items on sale tomorrow morning include a Sanyo 50" plasma HDTV selling for $998 and an Acer laptop PC selling for $348. While a $350 laptop was in the mix last Black Friday, a large 50" plasma TV for under $1,000 is quite a new entry for low prices on big flat-panel HDTVs. Customers will surely be lining up for that one.