he balmiest December in five years held down clothing sales, rendering the 2006 holiday shopping season lukewarm for retailers. Keeping merchants waiting, consumers delayed their final holiday shopping to late December, barely giving themselves time to wrap presents.

More so than in the past, "this holiday season came down to the week before Christmas, as consumers waited to the last minute to complete their shopping," Michael Niemira, Chief Economist and Director of Research for the International Council of Shopping Centers, said in a written statement.

Analysts reported that consumers put off both brick-and-mortar and online shopping. Consumers procrastinated because of the "gift card comfort factor," according to the ICSC. Gift cards are expected to account for 20% of January's sales, the council projected.

The National Retail Federation estimated gift card sales would grow 34% during the holiday season, to total $24.8 billion. "Gift card popularity seems as high as ever, as those sales not only boosted the last week in December, but are currently sustaining post-holiday figures, giving retailers something to smile about as we begin 2007," stated Bill Martin, co-founder of ShopperTrak RCT Corp.

ShopperTrak reported retail sales for November and December 2006 increased a respectable 5.1%, compared with the same two-month period in 2005.

The company also reported a 61.7% one-day increase in national retail sales for Saturday, Dec. 23, a total of $8.72 billion, compared with the same day in 2005. This "Super Saturday" still fell short of Black Friday's (Nov. 24) sales performance, which posted $8.96 billion in volume in 2006.

Worldwide, VisaNet processed a record $9.8 billion on Dec. 23 and handled 6,803 transactions per second during a one-hour period on the preceding day, according to Visa U.S.A.

Ho, ho, ho, merry commerce

Though still small by brick-and-mortar standards, online retail spending at U.S. Web sites for the last two months of 2006 grew 26% year over year, according to comScore Networks.

Non-travel retail e-commerce totaled $24.6 billion during the period. The season's 12 strongest days each surpassed the $600 million mark, with the strongest day being Wednesday, Dec. 13, (with $667 million) rather than Monday, Dec. 18, as some analysts had predicted. Dec. 18 didn't even rank among the top 12 online shopping days.

However, Monday, Dec. 11 was the second biggest day, with volume of $661 million. The Monday after Thanksgiving, dubbed Cyber Monday, ranked No. 12, with $607.6 million.

Unlike last year, Visa did not release domestic transaction volumes for the season. Instead, the card Association issued holiday milestones.

"Although this year turned out to be softer than many had predicted, overall results for the 2006 holiday period were very respectable," Wayne Best, Senior Vice President of Business and Economic Analysis for Visa, said in a statement.

Best noted four major trends affecting holiday sales:

· Cautious consumers: "Even though the job market has been healthy, with wages and salaries showing solid growth this year, shoppers appeared to be distracted by the shaky housing market," Best said.

Whereas home-equity refinancing had funded much Christmas shopping in previous years, this trend had dropped sharply in 2006 as interest rates rose, he added.

· Gift-card redemption: Retailers will capture some of their holiday sales only when gift cards are redeemed in the coming months. "Expect to see retailers enticing consumers to redeem their gift cards during the post-holiday shopping season, as merchants seek to extend the traditional season into the new year," Best said.

· Cross-selling: Drugstores and supermarkets experienced stronger sales during the season by selling products they typically don't carry.

"Providing consumers with products such as flat-screen televisions, personal entertainment devices and toys is one reason these and other segments may have performed better than others," Best said.

· Surge in gas prices: The rise in fuel prices at the end of the year pinched other spending.

The national average price per gallon was higher in December than a year earlier, Best said. "If consumers are spending more to fill up their tanks, they're probably spending less at the mall."

MasterCard Worldwide also acknowledged that retail sales during the season were soft, according to its SpendingPulse service.

The unadjusted growth rate for total retail sales, excluding autos, was up 6.6% from 2005, compared with an 8.7% growth rate during the 2005 holiday shopping rush. Adjusting for a shopping season that was one day shorter, the 2006 season grew just 3%.

"The 2006 holiday shopping season was generally a continuation of a trend of decelerating growth that we first started to track in the second quarter of this year," MasterCard reported.

Electronics and higher-end, luxury purchases were stronger than the national average, while apparel sales lagged.

Warm weather across the country may have held down sales of winter clothing, the company stated.

MasterCard also stated that online sales continued their year-long trend, growing 20% during the shopping season. And online shopping peaked the week of Dec. 11.

The company noted that sales figures on gift card revenue are not available because retailers cannot recognize gift card revenue until the cards are redeemed.

Big boxes, gift-wrapped

In spite of a soft season, the nation's biggest retailer had nowhere to go but up after its dismal 2005 performance. For December, Wal-Mart Stores Inc. reported a 3.1% increase in sales at all its domestic stores, bringing in $28.8 billion.

Wal-Mart's experience was in line with chain store sales overall, which experienced 3.1% year-over-year growth at comparable stores for the five-week period, according to the ICSC's Chain Store Sales Trends report.

Growth was slightly higher than expected, due to strong sales at wholesale and luxury stores, which grew 6.2% and 8.2%, respectively.

Wal-Mart's comparable-store sales were up a less rosy 1.3%. Electronics - such as gaming systems, digital TVs and digital audio - and the grocery business led the categories. The company's Sam's Club stores did better, at 5.6% growth overall, but 3.5% for comparable stores.

Target Corp. had a healthier season. Its comparable-store sales rose 4.1% in December over the 2005 holiday season, the company reported. Its sales including all stores were up 9.9%, to $8.4 billion, for the five-week period.