If you simply insist on looking for the worst in the early returns on holiday retail sales, there are dismal headlines galore posted at The Big Picture and at the Nouriel Roubini Blog.  But might I suggest that it is a bit premature to be drawing conclusions?  From the Chicago Tribune:

As gift cards gain in popularity, the week after Christmas has taken on greater importance for retailers keen on meeting year-end financial goals.

This year, gift cards are providing a glimmer of hope that stores will be able to make up for what has so far been a slower-than-expected holiday season...

Consumers are expected to spend a record $24.81 billion on gift cards this holiday season, up from $18.48 billion for the same period last year, a 34 percent spike, according to the National Retail Federation. Consumers spent an estimated 20 percent of their holiday gift-giving budget on gift cards this year, up from 6.6 percent in 2003, the Washington-based trade group said.

The change in shopping habits has forced retailers to re-evaluate the way they look at post-Christmas sales. They want to encourage shoppers to redeem gift cards right away because a gift card doesn't count as a sale until it is exchanged for merchandise.

And some similar thoughts from MSNBC.com:

Marshal Cohen, industry analyst with NPD Group, said his research shows that 51 percent of consumers planned to give someone a gift card this holiday. That’s up from 39 percent just a year earlier...

As more people turn to gift card giving, analysts say gift cards are starting to change how retailers think about their all-important holiday sales strategy, especially after Dec. 25.

“It also means that the holiday season really is longer than this November-December" time period, said Michael Niemira, chief economist with the International Council of Shopping Centers. "It really is a November-to-January story, with January being more important in recent years."

And from ABC News:

Robert Drbul, retail analyst at Lehman Bros., said that Dec. 26 to New Year's Eve now represents 10 percent of holiday sales, while January makes up 20 percent of holiday sales for the season...

The International Council of Shopping Centers, a retail trade group, estimated in October that gift cards in 2006 would account for $30 billion to $40 billion in holiday sales. Last holiday, customers redeemed nearly 40 percent of gift cards between Dec. 26 to Dec. 31st. In January, 38 percent more were redeemed.

The National Retail Federation, however, estimated that gift card sales would be slightly less, reaching just under $25 billion, for this holiday season. That represents 8 to 9 percent of holiday sales for the year.

Daniel Horne, a professor at Providence College who has studied gift cards extensively, estimated that the average gift card value would be around $37-$38 this year but could vary depending on the retailer. More important, Horne calculates that people spend about 40 percent more than the value of the gift card.

Horne believes that 25 percent of gift cards are redeemed the week after Christmas and that two-thirds are used by the end of January.

All of which is to say, it ain't over 'til it's over.