The spending bounce means retailers managed to avoid a repeat of last years disaster even amid tight credit and double-digit unemployment. Profits should be healthier, too, because stores had a year to plan their inventories to match consumer demand and never needed to resort to fire-sale clearances.
Retail sales rose 3.6 percent from Nov. 1 through Dec. 24, compared with a 2.3 percent drop in the year-ago period, according to figures from MasterCard Advisors SpendingPulse, which track all forms of payment, including cash.
Adjusting for an extra shopping day between Thanksgiving and Christmas, the number was closer to a 1 percent gain.
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Shoppers in Britain spent 132 million pounds ($210 million) online on Dec. 25 alone, a 29 percent increase from a year earlier, according to estimates by payment-processing company Retail Decisions. The number of U.K. customers on Boxing Day, the day after Christmas, increased by 19 percent, Experian Plc said in an e-mailed statement.
Retailers avoided last years pre-Christmas discounting by cutting inventory to “much healthier” levels, according to Morgan Stanley analysts. Prices, which were slashed by as much as 75 percent in 2008, were down by about - - - - >

Chancellor of the Exchequer Alastair Darling will restore the value-added tax, a levy on sales, to 17.5 percent effective Jan. 1, after reducing the rate to 15 percent a year ago to help pull the economy out of the recession.
Kingfisher, Europes largest home-improvement chain, is offering 50 percent discounts today on bathrooms and kitchen doors at its B&Q chain while DSG International Plc, owner of the Currys electronics stores and PC World, advertised Beat the VAT increase! on posters and reduced a Sharp Corp. 32-inch flat- - - - - >

But those numbers may be smaller as the industry braces for what some analysts believe will be a second consecutive holiday season of declines in gift card sales.
The final word on holiday gift card sales is not out. Mall of America is seeing gift cards flat through this week compared with a year ago. Mall operator Taubman Centers cited lukewarm sales heading into the final week before Christmas, but saw a rebound in recent days as threadbare shelves have left last-minute shoppers no other choice.
Overall, the recession has stolen gift cardss steam. Reduced consumer spending has extended to gift cards, - - - - >

Starting online yesterday, Best Buy Co. trimmed the price of a Dell Studio 17-inch notebook computer to $699.99 from $779.99. Toys “R” Us Inc. shoppers who buy a Nintendo Wii video game can buy a second game for half price.
Wal-Mart Stores Inc., which started cutting holiday toy prices Sept. 30, is trying to keep consumers coming back by offering a $50 gift card on purchases of Microsoft Corp.s Xbox 360 players through Jan. 1. Promotions intensified after last weekends East Coast snowstorm hurt sales going into - - - - >

Best Buy Co. trimmed the price of a Lenovo netbook computer by a third to $197 online today and in stores tomorrow. Toys “R” Us Inc. shoppers who buy video games including Sony Corp.s PlayStation 3 can buy a second game for half price.
Wal-Mart Stores Inc., which started cutting holiday toy prices Sept. 30, is trying to keep consumers coming back by offering a $50 gift card on purchases of Microsoft Corp.s Xbox 360 players through Jan. 1. Promotions intensified after last weekends East Coast snowstorm - - - - >

Sales this time of year are vital to retailers, of course. But theyre not nearly enough to drive the economy. Even if holiday sales exceed expectations, the broader recovery is expected to remain weak - for the rest of the year and beyond.
Heres why holiday purchases wont save the day:
- They make up a surprisingly small share of the economy. Last year, gift sales were estimated to account for less than 13 percent of the fourth quarters gross domestic product. And Mark Zandi, chief economist at Moodys Economy.com, thinks theyll account for about the same share of this quarters GDP - - - - >

The last Saturday of shopping before Christmas, usually one of the busiest days of the year for retailers, was snowed out on most of the East Coast by blizzard-like conditions that stretched from the Carolinas to New England.
Many retailers were open but crowds were sparse on a day stores count on for a successful season.
Treacherous roads and near whiteout conditions kept many shoppers away from shopping malls and other stores. For retailers hoping for a better holiday season than last years dismal sales, the bad weather was especially painful.
“You are looking at your busiest day of the year and taking - - - - >

The company “hopes” to resume running tomorrow, London- based spokesman Paul Gorman said in a phone interview. About 28,000 passengers are affected by todays suspension, he said. They can request a refund or reschedule their journey, he said.
All services were suspended yesterday, disrupting more than 31,000 passengers, after four Eurostar trains broke down in the Channel Tunnel the night before and a fifth was delayed. Eurostar Chief Executive Richard Brown said in an interview with Sky News that the temperature change on entering the tunnel created - - - - >

Household purchases rose 0.7 percent for a second month and incomes climbed 0.5 percent, the most since May, according to the median estimate of 60 economists surveyed by Bloomberg News before a Commerce Department report Dec. 23. Combined sales of new and existing homes last month may have reached the highest level since May 2007, other figures may show.
Government efforts to push down interest rates and spur lending, combined with discounts by merchants such as Best Buy Co., may encourage consumers to keep buying in coming - - - - >