The worst fears of the retail industry were realized as holiday retail sales fell below expectations. Research firm ShopperTrak reported that Thanksgiving and Black Friday only produced $12.3 billion dollars for the industry. That number was higher by only a tiny amount compared to 2012.

ShopperTrak reported:

With the allure of deep discounts, “door-buster” promotions and extended store hours, shoppers visited more stores and spent more money across the days of Thanksgiving Day and Black Friday (Nov. 28 and 29) than they did last year.

ShopperTrak, the leading provider of shopper analytics, estimates that, when compared to Thanksgiving and Black Friday last year, brick-and-mortar shopper traffic increased 2.8 percent, to more than 1.07 billion store visits. Retail sales also increased by 2.3 percent, as shoppers spent an estimated total of $12.3 billion across the two days.

To make matters worse, those deep discounts may have been so deep that margins were squeezed enough at some retailers so that a portion of the industry had no profits at all over the two days.

The National Retail Federation forecast:

NRF expects sales in the months of November and December to marginally increase 3.9 percent to $602.1 billion, over 2012’s actual 3.5 percent holiday season sales growth. The forecast is higher than the 10-year average holiday sales growth of 3.3 percent.

So, Thanksgiving and Black Friday lagged well behind that.

While the numbers may be a disappointment for large and healthy retailers like Wal-Mart Stores Inc. (NYSE: WMT), they are very likely to be disastrous for the weakest big retailers — J.C.Penney Co. Inc. (NYSE: JCP) and the Sears and Kmart divisions of Sears Holdings Corp. (NASDAQ: SHLD). Each needs sharp increases in its holiday results to halt slides in sales that have now lasted several years. Analysts are concerned that both companies may be low on cash. If so, trying to recoup momentum in 2014 after failed November and December sales will be virtually impossible.

There is a very modest chance that people who did not brave malls over the Thanksgiving weekend will pour into stores in December with large amounts of cash or credit cards in hand. But in year in which consumer spending has been relatively muted, that is hardly likely.

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