NEW YORK (CNN/Money) - Shoppers flocked to the malls for bargains the last weekend before Christmas but it may not have been enough to save the holiday season for the nation's retailers, analysts and industry watchers said.

Merchants such as J.C. Penney and Federated Department Stores reported Monday that even with heavy discounting, the late sales rush they were hoping for failed to materialize. The Saturday before Christmas traditionally is the busiest shopping day of the year.

Scott Krugman of The National Retail Federation talks about retail sales and profits expected for this holiday season. Play video (QuickTime, Real or Windows Media)

"It was disappointing," Kurt Barnard, president of Barnard's Retail Consulting Group, said of weekend sales. "A lot of stores told us that when they opened at 7 or 8 in the morning with special deals good for two hours, crowds were beginning to mass. But at the stroke of 9, when those sales were supposed to end, the crowds disappeared like a snowflake in the palm of your hand."

Barnard predicts a 2 percent to 2.5 percent increase in holiday season sales over last year, which would be the worst season in more than a decade. By contrast, the National Retail Federation, the industry's largest trade group, predicts a 4 percent increase, but that's still historically at the low end of the group's forecasts.

Nevertheless, mall operators sounded enthusiastic about this past weekend's sales, though many admitted that traffic was off a bit from last year.

"It's what you expect given that it's a short selling season," said Michael Baker, director of research at the International Council of Shopping Centers. "You can't shop online or by catalog anymore" if you want delivery for Christmas.

At the Roosevelt Field mall in Garden City, N.Y., the parking lots were full by 11 a.m. Saturday as last-minute shoppers picked up home goods, housewares, jewelry and sweaters, said Les Morris, spokesman for Simon Property Group, which owns the mall and 247 others nationwide.

Shoppers at the Fashion Center in Arlington, Va., and at Orland Square near Chicago, lured by big sales and discounts, waited in long lines to make their last-minute purchases, Morris said.

Meanwhile, gift certificate sales at the Burlington Mall in Burlington, Mass., jumped 28 percent from a year earlier, and buyers snapped up electronics, toys, jewelry, clothing and home items.

Separately, sales were brisk at the 4.2-million-square-foot Mall of America, the nation's largest, in Bloomington, Minn. Spokeswoman Monica Davis said big discounts were behind many of the sales.

"I think sales have gotten a little bit more aggressive," Davis said. "Sales have been really strong. We've been pleased with our traffic. I think a part of that is because we are a destination."

Retailers have been struggling to lure shoppers into stores during the critical holiday season, hoping that major sales would overcome buyers' fears about losing jobs, a slack economy and the potential for war with Iraq.

Merchants had a good start to the season with better-than-expected sales during the Thanksgiving weekend, but subsequent sales were surprisingly weak.

"Shoppers are outsmarting the stores even more this year and waiting until the last minute to get the best deals," Burt Flickinger 3rd, managing director of Reach Marketing, a retail consulting group, told the Associated Press.

Still, traffic and sales were disappointing, and with only two shopping days left, it appears unlikely consumers will spend enough to rescue an otherwise disappointing season, the consultant Barnard said.

Sales figures released by some major retailers Monday seemed to prove Barnard's point.

Wal-Mart Stores Inc. and Federated Department Stores said holiday sales are tracking below forecasts as shoppers wait until the last minute in hopes of snagging the best bargains.

Wal-Mart (WMT: up $0.20 to $49.79, Research, Estimates), the world's largest retailer, said overall sales at stores open at least a year, a key gauge known as same-store sales, are tracking at the low end of its forecast for a 3 percent to 5 percent increase. Sales at Wal-Mart discount store division are running slightly below forecasts.

Separately, Federated (FD: down $0.02 to $27.82, Research, Estimates), the owner of Macy's, Bloomingdale's, and other department store chains, said same-store sales for December and January will miss forecasts, which were for flat to a 2.5 percent decline. But the Cincinnati-based company said it remains difficult to forecast results given the expected last-minute rush of holiday shopping.

But J.C. Penney (JCP: down $0.38 to $21.95, Research, Estimates) said December department store sales still were tracking slightly above forecasts for a small increase. Sales at its Eckerd drugstore chain still are expected to increase 6 percent from last December but catalog sales are forecast to slip 20 percent from a year ago.