The holidays were hell for the nation's retailers, which Thursday reported sales drops or at best whisker-thin increases during the most important shopping season of the year.

        No industry segment was spared from consumer conservatism during the month of December. Major discounters, typically the heartiest merchants, posted near-flat sales increases. Several department store and specialty chains posted declines compared to December 1999, the best holiday sales period on record.

        What hurts retailers most is that many of their sales reports fell below expectations, forcing chains to cut fourth-quarter profit estimates and carry inventories into the new year, at lower prices. Several chains, including Sears Roebuck & Co., plan to close down stores; some others have shut down altogether.

        “We expected more, and it just didn't happen,” said Pamela Rucker, spokeswoman for the National Retail Federation. “Energy prices, weather ... people talking about a recession three weeks before the holidays doomed the retailers.”

        Some analysts expect the lower sales trend to continue well into 2001.

        “This has been the worst December I have seen in about eight or nine years, no question about it,” said Kurt Barnard, president of Barnard's Retail Trend Report in Montclair, N.J.

        Federated Department Stores on Wednesday said sales at its stores open at least a year rose 1.2 percent. Dillard's Inc. said same-store sales fell 4 percent, and Saks Inc. said sales decreased 0.4 percent, led by a 3.1 percent sales drop at its Saks Fifth Avenue division.

        Dayton-based Elder-Beerman said sales fell 0.8 percent.

        The dismal holiday buried some retailers. Out-of-towners Montgomery Ward and the discount chain Bradlees recently said they would cease operations.

        Walter Loeb, of the New York-based retail consulting firm Loeb Associates, said their liquidations will disrupt other chains, possibly forcing them to cut prices.

        “It is also likely for some other retailers to do some partial closings,” he said.

        Wal-Mart reported a sales increase of 0.3 percent. Kmart and the Target stores division of Target Corp. posted a 0.7 and a 0.9 percent rise, respectively.

        Columbus-based the Limited surprised analysts with flat sales, while Abercrombie & Fitch said same-store sales fell 11 percent. Gap sales toppled by 6 percent.

        Mr. Loeb said retailers are likely to curtail their merchandise buying based on current spending patterns.

        “Overall, I'm looking at lower profitable sales and a trend that will only pick up in the fall of 2001, if then,” he said.

        There were a couple of good surprises, though. Among them: Kohl's reported a 14.8 percent same-store increase and Talbots said sales rose 12.9 percent.

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