Roughly one year ago, around the Thanksgiving festivities, the National Bureau of Economic Research announced that the U.S. recession started in December 2007. One year later, though the U.S. economy is in recovery mode, retailers are approaching the holiday season--which accounts for slightly less than one- fifth of yearly U.S. retail sales--with some concern.

A sharp collapse in U.S. consumer spending since mid-2008 led to a particularly dismal 2008 holiday retail season. As per U.S. Census Bureau estimates, core retail sales (which exclude autos, gasoline and building supplies) fell by 1.1% year on year during November and December 2008, compared to an average 4.6% year-on-year increase in holiday season sales over the past decade. Total retail sales suffered a larger...