Retailers pulled out all the stops during the days before Christmas by extending hours, upping promotions and doing everything they could think of to spur one last spending blitz from stretched U.S. consumers. The official numbers won't be known until next Thursday when retailers report December same-store sales results, but many observers think the last-ditch efforts just may have worked. That's doubly good news considering that retailers are also expecting a healthy January thanks to the record volume of gift card sales this year.

Predictions still run the gamut, but some observers think same-store sales gains may be as high as 4 percent for November, December and January combined--above ICSC's preliminary forecast of a 2.9 percent same-store sales gain during that stretch. If retailers do match that prediction, it means the season will exceed 2006's results of a 3.2 percent gain during those months and would be within shouting distance of the 20-year median annual increase of 4.5 percent.

"The bottom line on this holiday season is that while it wasn't a great year, it was certainly better than people expected it to be," says Bill Martin, co-founder of ShopperTrak, a Chicago-based firm that tracks foot traffic at more than 50,000 retail and enclosed mall locations throughout the United States. ShopperTrak estimates same-store sales gains will come in between 3.6 percent and 4 percent.

That prediction is ahead of what ICSC has tracked to date. After a surge during the first week of December, with 3.1 percent, same-store sales growth for U.S. retail chains lingered around 2 percent, with a 2.3 percent increase the week of December 8, a 2.1 percent increase the week of December 15, a 2.8 percent increase the week of December 22 and a 2.3 percent increase the week of December 29.

But consumers still have another say in determining how the holiday season will turn out. The coming weeks are a critical stretch because of the ever-increasing volume of gift card redemptions. This is important, experts say, because retailers do not count gift card sales when the cards are sold, but when they are redeemed. That shifts a bigger piece of the December sales pie into January and later each year. One estimate is that sales of gift cards grew 25 percent this year to about $35 billion, according to Archstone Consulting LLC. As a result, gift cards may account for up to 6 percent of total U.S. holiday spending, up from 5 percent in 2006.

According to a survey completed by Standard & Poor's Equity Research Services, two thirds of all gift cards are redeemed by the end of January. The New York City-based firm estimates gift card redemptions will result in January same-store sales increase between 3 percent to 3.5 percent.

"Currently, we have 70 percent of Americans buying gift cards, which is an all-time high, so that's obviously going to be a big factor this year," says C. Britt Beemer, founder of America's Research Group, a Charleston, S.C.-based consumer behavior research firm. But, he adds, many people will hold on to their cards until springtime because of lack of must-have items or attractive merchandise in the stores at the moment.

Beemer also isn't sure if the last-minute rush of promotions ultimately bailed out retailers. The pressures on consumers--including the housing bust and high energy and food prices--meant that many shoppers cut down on spending and consolidated trips to shopping centers. America's Research Group estimates holiday same-store sales grew just 1.8 percent. Beemer says the biggest beneficiaries of the one-stop trend have been big box retailers like Best Buy and warehouse retailers such as Costco, BJ's Wholesale Club and Sam's Club.

Another retailer that seems to have benefited from the 2007 holiday season is Wal-Mart. Analysts polled by Thomson Financial expect the world's largest retailer to post a 2 percent same-store sales increase for December, above its year-to-date average of 1.4 percent. The increase will also mark the first time in decades the Bentonville behemoth will outperform main rival Target during the holiday season. Thomson estimates a same-store sales decline of 1.2 percent for Target in December. Year-to-date Target's same-store sales averaged growth of 3.9 percent. In 2006, Wal-Mart's December same-store sales grew 1.6 percent, while Target's rose 4.1 percent.

Wal-Mart's strategies included an early start on holiday sales (at the beginning of November, instead of the traditional Black Friday), deep discounts on popular toys and electronics and a push on sales of gift cards. When researchers from Customer Growth Partners, a New Canaan, Conn.-based consulting firm, visited Wal-Mart stores between 5:30 p.m. and 6:00 p.m. on Christmas Eve this year, they found the parking lots occupied by up to 98 percent. Overall, the firm conducted 2,000 store visits during the holiday season to 150 major retailers, including at least 10 Wal-Mart locations nationwide.

"This holiday season has been a real turnaround for Wal-Mart," says Craig Johnson, president of Customer Growth Partners.

The season also included some losers. The women's specialty apparel sector posted a sales drop of 2.4 percent between Black Friday and December 24, according to SpendingPulse, a macro-economic report that tracks national retail sales for MasterCard Advisors. That compares to an increase of 1.4 percent for the overall specialty apparel sector.

Mid-tier department stores also suffered losses, according to Johnson. On December 28, Macy's announced its plans to close nine under-performing stores, in Indiana, Ohio, Louisiana, Oklahoma, Utah and Texas. Earlier that month, Macy's said it expected same-store sales for the 2007 holiday season to register a 4 percent to 7 percent decline compared to last year, ostensibly due to the shift in schedule resulting from an early Thanksgiving weekend.

"Sectors that were weak before, including women's wear retailers, mid-tier department stores and conventional mall stores, continued to be weak," Johnson says. "And sectors that were strong, such as electronics, continued to be strong."

Johnson predicts total 2007 holiday sales will reach $540 billion, up 6 percent compared to 2006.

--Elaine Misonzhnik