The Verdict on Holiday Retail is Here

MasterCard's post-Christmas SpendingPulse report confirms what many entrepreneurs already know: Spending was down among holiday shoppers. How much? MasterCard says 5.5 to 8 percent compared to last year. Not too bad, especially considering that the Commerce Department reported recently that consumer spending was actually up 0.6 percent in November when inflation is taken into account.

The half-price deal on gas vs. July's peak has given some consumers a reason to break out the cash this winter. In fact, MasterCard says that the decrease in spending at the pump accounts for nearly half of the holiday retail slide. Still, a rough patch of icy cold weather, hitting right at the peak of last-minute holiday sales, put an extra damper on the season.

"A difficult economic environment combined with unfavorable weather during the last week of shopping made 2008 one of the most challenging holiday shopping seasons in decades," says Michael McNamara, vice president of research and analysis for SpendingPulse.

Apparel sales decreased 14 to 21 percent (the lesser number belonging to menswear, the latter to women's clothing), electronics dove 26 percent and luxury goods dipped 34 percent, the biggest decline of any retail sector, according to MasterCard.