NEW YORK (CNN/Money) - Sales results released Thursday by major retailers for the crucial December holiday period show that it was anything but a merry Christmas for most U.S. store chains.

With the exception of a strong showing by J.C. Penney, other retail benchmarks such as Wal-Mart, Federated Stores and Sears Roebuck suffered lackluster holiday sales, despite heavy promotional discounting, as buyers tightened their spending habits amid a weak economy, a struggling job market, and uncertainty about a possible war with Iraq.

"Retailers faced a dog-eat-dog sales environment that led to fierce competition for consumers,” Ken Perkins, retail research analyst with First Call, wrote in a research note.

"Many retailers were heavily on sale throughout December in an attempt to lure fickle shoppers. But comparable-store sales and margins both took a hit as a result,” he said.

First Call's estimate for total December same-store sales -- at stores open at least a year -- is for a modest uptick of 1.5 percent, down 0.6 percent from the 2.1 percent gain in mid-December.

“Given that November was the only month this year were same-store sales were negative, falling 0.4 percent, retailers had pinned their hopes on a robust pickup in December sales,” Ken Perkins, retail research analyst with First Call, wrote in a morning note.

The critical holiday shopping season, which traditionally begins before Thanksgiving and runs until the first week of the New Year, typically accounts for about 20 percent of total sales. The Thanksgiving weekend itself accounts for about 8 percent of holiday sales, and the post-Christmas period usually contributes about 10 percent.

Many retailers were hoping that the post-Christmas rush would bump up their meager holiday sales, but that happened for only a few retailers.

“I think the better sales results happened because of accelerated buying in the fourth and fifth week of the December,” said Bill Dreher, retail analyst with WR Hambrecht. "Consumers and retailers were playing chicken, where consumers weren't buying until the last-minute markdown happened and merchants were waiting until the last minute to avoid more discounts to make profits. But consumers couldn't hold out any longer by Christmas."

Dreher said gift cards also helped to prop sales. “Gift cards account for roughly 5 to 10 percent of holiday sales,” he added.

Also, industry watchers pointed out that a dearth of “must-have” items leading up to the holiday period -- whether in apparel fashion, “hot” toys or gaming platforms -- gave consumers no compelling reason dish out the dollars, forcing some discounters to trim their profit estimates for the fourth quarter.

"The holiday season started out slow and then picked up the weekend prior to Christmas. The strength continued for several days following the holiday and then leveled off," Wal-Mart said in a recorded sales update.

Wal-Mart, the world's biggest retailer, said December same-store sales rose 2.3 percent, in line with its lowered forecasts. Total sales for the five-week period ended Jan. 3 rose 9.5 percent from a year earlier to $31.6 billion. The company said a last-minute surge in holiday sales came too late to make up for a slow start.

Holiday sales strength was most apparent in its electronics, intimate apparel, toys and pharmacy units. But December same-store sales at its Sam’s Club Warehouse Stores fell 2.8 percent.

For the January period, the retailer said it sees same-store sales at its Wal-Mart unit up between 3 and 5 percent and total January sales up between 2 and 4 percent. The company said inventories still are higher than expected, "but are manageable."

Wal-Mart (WMT: Research, Estimates) shares rose 96 cents to $50.95 in morning trading.

“This was a very challenging and disappointing holiday sales period," said Kurt Barnard, president of Barnard's Retail Consulting Group.

“Consumers are worried about job security and they're not spending as much. This means that retailers will have to be even more careful about how they position themselves to make their products more attractive to consumers.”

J.C. Penney reported December same-store sales rose 4.7 percent, above its forecast for a 4.5 percent increase, boosted by sales in its children’s, jewelry and home products units.

Despite the weak performance at its Eckerd drugstores, the retailer said it expects operating earnings in its fiscal fourth quarter, ending in January, to be in line with Wall Street’s estimates of between 59 and 65 cents per share, according to earnings tracker First Call.

J.C. Penney (JCP: up $0.48 to $24.37, Research, Estimates) shares rose 41 cents to $24.30 in early trade.

“Those [retailers] who thrive in this kind of environment are the ones who reinvent their products and store-shopping experience, “ Dreher added. “J.C. Penney repositioned itself and Kohl’s also reinvented its apparel shopping experience. Wal-Mart offers a complete shopping experience from cosmetics to food to clothes. That kind of strategy will help retailers improve their overall margins.”

Kohl's (KSS: up $3.11 to $56.01, Research, Estimates) reported December same-store sales rose 3.3 percent from a year ago but missed First Call estimate of a 6 percent growth. The specialty retailer also said it expects fourth-quarter earnings to be at the low end of a 79 to 84 cents a share range. First Call forecasts a profit of 82 cents a share.

Meanwhile, Federated Department Stores (FD: up $1.36 to $30.57, Research, Estimates), the operator of Macy's and Bloomingdale's among other department store chains, posted a 2.6 percent drop in December same-store sales but reaffirmed its fourth-quarter estimates to be at the lower-end of its $1.95 to $2.05 a share range. Analysts expect the retailer to earn $1.95 a share, according to First Call.

Sears Roebuck's (S: up $1.78 to $26.83, Research, Estimates) December sales fell 4.6 percent, while Target (TGT: up $0.97 to $31.09, Research, Estimates) posted a modest dip of 0.3 percent. Target said hinted that the sales shortfall could hurt its fourth-quarter earnings.

“Until the overhang of a weak economy lifts and boosts consumer confidence, retail weakness will probably continue,” Dreher said. “When that happens, we could get a strong back-half of 2003 for retailers. But at the earliest, I see some improvement maybe in the first or second quarter.”