December is not shaping up to have been the retail windfall that many experts predicted, which may be setting up a rather scary situation. Don't worry folks, the experts are going to blame the poor December revenue on different factors, including strong November sales taking away from December and post-Christmas sales suffering from the Northeast blizzard.

First things first, not all retailers have reported their results -- a majority of heavy hitters will report today. Nevertheless, the results are being described as "slow and steady" rather than the expected blowout holiday shopping season. For example, Costco (COST) reported sales that increased 6%. This is positive data, unfortunately expectations called for an increase of 6.2%. Target (TGT) saw sales increase 0.9%, well short of the expected 4%. Of course sales were better at Macy's (M), right? I mean they are adding jobs and all. Wrong, sales did increase (3.9%) but missed expectations (4.5%).

Monday morning, Amazon.com (AMZN) announced that the third-generation Kindle is now its best-selling product of all time, unseating former title-holder Harry Potter and the Deathly Hallows. Amazon didn't provide specific sales figures for the e-reader, but the retail giant added that more Kindle books were purchased this past Christmas Day than on any other day in history -- confirming that the gadgets are quite a popular gift.

Meanwhile, Nov. 29 -- or "Cyber Monday" -- was the peak day for holiday shopping on Amazon. More than 13.7 million items were ordered worldwide on the Monday after Thanksgiving, which translates to about 158 items per second.

Galactic super-retailer Walmart Stores (WMT) released its highly anticipated third-quarter earnings report this morning. The company reported a 9.3% increase in profit, thanks mainly to growth abroad. Excluding tax benefits, Walmart pulled in 90 cents per share during the quarter; matching the consensus estimate and making many investors rather happy.

Looking ahead, the retailer forecast fourth-quarter earnings between $1.29 and $1.33 per share. The lower end of this range is a penny better than the Street's expected earnings of $1.28 per share. As for the full year, the retailer now expects to earn $4.12 per share, a full seven cents better than its previous forecast.

This morning, the National Retail Federation (NRF) issued its forecast for the 2010 holiday shopping season. The NRF believes sales will increase 2.3% to $447.1 billion. The growth is slightly lower than the 10-year average of holiday sales increases (2.5%), but such an increase would be a major improvement over past years. In 2009 holiday sales improved 0.4%, slow but better than the 3.9% decline in 2008.

On Tuesday evening, I took a different route home than usual, and drove past my local Blockbuster (BBI) store. It was hard not to notice the brand new "Store Closing" sign, and my carpool buddies and I briefly discussed the stiff competition the chain is facing from Netflix (NFLX) and smaller rival Redbox.

Well, in light of last night's updated fiscal-year outlook, I'm beginning to think I may have witnessed a real-life bad omen (feel free to email me for your own psychic reading). After Wednesday's closing bell, Blockbuster confessed that its preliminary fourth-quarter and full-year results were unexpectedly weak -- and as a result, shares of the penny stock are slipping ever closer to theoretical support at zero.

The second best shopping day of the holiday season didn't come until after the festivities ended. Dec. 26, 2009 wasn't good enough to top Black Friday, but data from ShopperTrak shows that it did shoot past the last Saturday before Christmas, which is usually among the top days of the holiday season. This year, that Saturday wasn't able to realize its potential because of a snowstorm that smacked the East Coast.

Store traffic fell 6.6% from 2008 for the day after Christmas, but sales still reached $7.9 billion. Analysts expected the the first post-holiday shopping day to assume more importance, largely because of the storm a week earlier

The holidays have ended, and the real sales have begun. Those choosing to sacrifice sentimentality for savings found retailers only too willing to help, as prices were slashed in the wake of the Christmas rush. Recipients of gift cards stand to see their purchasing power extended, as well, now that redemption time has arrived, and retailers are looking to squeeze in any extra sales they can to pump up their top lines before the books close on the fiscal year, which, for many, comes at the end of January.

Toys "R" Us has offered a deal on Nintendo (NTDOY) Wii games, with the second coming at half price, and Target (TGT) is nearly halving the price of wine glasses and dropping the tag on an argyle women's sweater by nearly a third. Walmart (WMT), which kicked off its cuts at the end of September, is throwing a $50 gift card on top of any Microsoft (MSFT) Xbox 360 buy.

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:

The price at the cash register ticked higher in October, though it was driven by the cost at the pump and on the lot.

Energy prices and new car sales (the highest in 28 years) pushed consumer prices upward in October, they're still cheaper than they were a year earlier. The Labor Department reports that consumer prices edged up 0.3% last month, a tad higher than the 0.2% anticipated. Take food and energy out of the equation, and inflation rose 0.2%, again ahead of the 0.1% that analysts expected.

Every day, it's becoming clearer that e-readers will be the hot holiday gifts of 2009. Amazon (AMZN) is obviously in the game with its Kindle, with which it took an early lead in the industry. Barnes & Noble (BKS) has made a play with its new Nook reader, applying some pressure to what was once a wide open space.

Even though we're still short of Black Friday, the weeding process has begun. Sony (SNE), which is also in the e-reader market, has revealed that it makes no guarantees about delivery by Christmas.

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.

There's a chill in the air and a slight up-tick in confidence. Holiday discounts are coming a bit earlier, too. For retailers, this has been a great combination, leading to the second consecutive month in which retail sales increased.

This follows more than a year of drops. Consumers aren't going crazy, but they are loosening their wallets a little bit. Consumer spending accounts for 70% of the U.S. economy, and the coming holiday season is where the action is -- for the retail sector and, consequently, for everyone else.

It's going to get worse before it gets better, according to Stone & McCarthy Research. Early 2010 has "the more troublesome outlook," as the economy will have to walk on its own, the research firm says. This year, it's had a pair of crutches: tax credits for first-time home buyers and the cash-for-clunkers program. So, if the stimulus hasn't taken hold by the end of the year, the first quarter could be a bruiser.

The firm adds that "continued growth in aggregate demand" is needed, bringing the discussion back to consumer spending . . . which is where it will always land. We're likely to see the 3.2% growth rate from July through September drop to 2.4% at the end of the year because the crutches will have been gone. And, let's not forget that unemployment is expected to break the 10% level next year.

Investors in luxury leather goods maker Coach Inc. (NYSE: COH) saw their shares tumble earlier this week when the company announced that profit fell 14% in its second fiscal quarter.

Coach earned 67 cents per share for the quarter compared to earnings of 69 cents per share in the year-ago quarter, and sales fell 1.8% to $960.3 million. Gross margin narrowed to 72.1% from 75.4% last year.

Like many other companies, Coach did not provide guidance for the balance of the fiscal year, signifying its lack of visibility going forward. But the company did try to assure investors by pointing to its nearly debt-free balance sheet and large cash position. Shares fell by as much as 15% during trading on Wednesday, but rallied to halve that loss later in the day.

In order to "protect our brand identity," CEO Lew Frankfort said the company resisted discounting during the holiday season. It paid a steep price to do so, because other retailers' heavy discounts hurt traffic at Coach's stores and in department stores.

Massive bookselling chain Borders Group, Inc. (NYSE: BGP) reported today that holiday sales for the nine-week period ended Jan. 3 fell to $868.8 million, down 11.7% from a year ago. Same-store sales for the holiday season plunged 14.4%. The retailer said that holiday sales started off slow, but accelerated as the season continued.

Additionally, the bookseller said that CEO George Jones will be replaced by private equity executive Ron Marshall. The new chief executive has previously helmed turnarounds at food distributor Nash Finch Co. and supermarket chain Pathmark Stores Inc. Borders stated that the new appointment will help to "more aggressively drive a turnaround of the company within today's challenging economy."

Borders Group is also getting a new chief financial officer; Mark Bierley will be internally promoted to the position, replacing Ed Wilhelm.

BGP could definitely benefit from Marshall's turnaround prowess. The stock has endured a stomach-churning 52-week plunge of 95.2%, and is currently trading below 50 cents per share. By contrast, competitor Barnes & Noble, Inc. (NYSE: BKS) surged more than 9% today after scoring an upgrade from Sell to Neutral at Goldman Sachs.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.