Devoted to Managers and those that seek to improve their management skills

... and probably will for 2008 also.

Economic conditions drove consumers to discount retailers in the U.S. as they ended with with year-over-year increases, while the majority of other retailers stumbled during the Christmas season.

Wal-Mart (WMT) performed within its guidance of between an expected 1 percent to three percent increase in sales for the season over last year, ending with a 2.4 percent increase in sales for December.

CostCo (COST) also did really good with a strong increase of 7 percent over December 2006.

For the rest of the retailers, for the most part they had a dismal Christmas selling season. Macy's (M) plunged in sales for December, falling by 7.9 percent.

Jc Penny (JCP) wasn't too far behind in their drop, as they had a 7.5 percent decline in sales, while another department store, Nordstroms (JWN) fell by 4 percent.

Same-store sales for Gap (GPS) declined by 6 percent, although their international sales held a little stronger, dropping by a much smaller 1 percent.

Abercrombie & Fitch (ANF) continued the downward trend, as they fell by 2 percent over the holidays.

One surprise was discounter Target (TGT). While it was expected they would have decline in same-store sales for December, the drop was much higher than the expected 2.5 percent, finishing down by 5 percent from 2006.

I don't think this is going to be something that goes away anytime soon. Discount retailers will rule the roost for the months ahead, as consumers increasingly go to them in the midst of economic concerns.

The real story will be how much they may have to discount and the resultant pressure on earnings that come with it. 2008 will be a challenging year for the retail sector, there's no doubt about it.