Holiday spending may be great for online retailers, but it disappointed many brick and mortar retailers. These stores not only lost sales to the internet, but also had to combat lower consumer spending amid a tough credit and housing market. Many customers that tapped home equity lines are switching to credit cards and reducing their spending. It will be interesting to see whether the default rates on any of the store-based credit cards increase along with the default rates associated with the larger credit card banks...

From the New York Times:
American consumers, uneasy about the economy and unimpressed by the merchandise in stores, delivered the bleak holiday shopping season retailers had expected, if not feared, according to one early but influential projection. Spending from Thanksgiving to Christmas rose just 3.6 percent over last year, the weakest performance in at least four years, according to MasterCard Advisors, a division of the credit card company. By comparison, sales grew 6.6 percent in 2006 and 8.7 percent in 2005.