For the current year's July-September period, more and more retailers posted positive figures and better-than-expected earnings. Strict cost cuts, restructuring and slashed inventories have been credited by companies for the success, but they have been quick to assert that shoppers are still cautious about spending money.

Retail sector giants like Macy's. JC Penney and Wal-Mart posted third quarter earnings this week and each of them nudged their complete year business forecast higher despite recording a decline in sales figures, which has come as much delightful news for a market which had been one of the most hurt due to the global economic downturn.

Christmas Season is generally a happy time for retailers, and as much as 40% of the year's sales recorded by the industry happen during this time. But for this year, retailers are keeping their hopes at the lowest, while still licking last year's wounds. A survey by Reuters and the University of Michigan on Friday reported that for October, consumer confidence was 70.6 points, down from September's 73.5 points, which means that although the economy seems to be recovering, people are still wary about spending, something that is sure to hurt retailers for quite sometime to come.

"The ongoing economic recovery will be unlike any other due to changes in consumer spending preferences", said Richard Curtin, director of the survey. Industry trade group National Retail Federation has predicted that Holiday Season sales will fall 1% this year compared to last year. It seems that it will take sometime for customers to return to their pre-recession spending habits. Until then, retailers will just have to wait.