U.S. retailers from Macy's to Costco posted much weaker-than-expected sales for November as shoppers focused only on big bargains at the start of the key holiday selling season.

The Thomson Reuters same-store sales index rose 0.5 percent for the month, falling far short of Wall Street expectations for a 2.1 percent increase. Many retail shares traded lower on Thursday after the reports, led by declines for teen and children's store chains. The Dow Jones Retail Index was down 0.65 percent <.DJUSRT>.

Analysts warned retailers not to expect December to rescue the holiday season, as tight credit and high unemployment dim hopes for a consumer recovery.

This might be another season where it is a fight for share of wallet versus total increase in spending, said Chris Donnelly, a partner in Accenture's retail practice. It's pretty clear this is not a consumer who is going to be buying a lot of full-priced products.

Many retailers said the weak sales were in line with their expectations and that margins should remain intact due to inventory cuts and other cost saving measures.

The thing we're not seeing is profit warnings, said Brian Girouard, global leader of Capgemini's consumer products and retail practice. The analysts are disappointed and the stockholders are a bit disappointed as well, but ... it's going as planned as far as the retailers are concerned.

For example, Victoria's Secret owner Limited Brand Inc forecast a low-to-mid-single-digit decline in December same-store sales, but said it would offer fewer promotions.

But retailers could still blink to attract more sales.

If you see someone get a little bit more promotional ... other retailers will react because they have no choice, Barclays Capital analyst Robert Drbul said.

Macy's shares fell 3.2 percent in morning trading, while Costco declined 3 percent. Among teen retailers, Aeropostale dropped 11.3 percent after forecasting quarterly results that could miss analysts' estimates, while disappointing monthly results from Abercrombie & Fitch sent its shares down 7 percent.

For a graphic on November sales, click http://link.reuters.com/ryb84g.

LOTS OF MISSES

A total of 81 percent of retailers tracked by Thomson Reuters missed estimates, including Costco Wholesale Corp , Children's Place
and Walgreen Co .

Over the U.S. Thanksgiving weekend that began on November 26, shoppers focused mostly on promotions and made few impulse purchases as concerns about the economy remain top-of-mind.

Early data on weekend shopping showed only a slight increase in retail sales from 2008, when consumers were hammered by a deepening recession and credit crisis.

Retailers are in fact driving traffic to their stores through very targeted promotions that amount to loss leaders, said analyst Brian Sozzi of Wall Street Strategies Inc.

It looks as if the litany of Black Friday and Cyber Monday surveys did not exactly paint a clear picture of the start to the holiday selling season, Sozzi said of early hopes for a strong Thanksgiving weekend.

The International Council of Shopping Centers forecast a 2 to 3 percent increase in December same-store sales, which would result in an estimated 1 percent rise for the November-December holiday season.

TEEN RETAILERS, DEPARTMENT STORES WEAK

Retail sales are closely watched as consumer spending makes up roughly 70 percent of the U.S. economy. But the figures do not include many key holiday destinations, including industry leader Wal-Mart Stores Inc .

Macy's said on Thursday that same-store sales fell a worse-than-expected 6.1 percent during the month. It stood by its forecast for quarterly earnings of $1.00 to $1.05 a share, excluding items, but that was below expectations.

Abercrombie & Fitch's same-store sales fell 17 percent, far worse than the analysts' average view of a 9.3 percent drop. Aeropostale sales were slightly worse than expected, with a 7 percent rise. The company's quarterly earnings forecast also disappointed.

Costco said same-store sales rose 6 percent, missing the analysts' average estimate of 8.1 percent. Same-store sales at U.S. locations rose 2 percent.

Children's Place posted a 13 percent drop in comparable sales, including online sales, compared with analysts' expectations of a 1 percent rise.

(Additional reporting by Nicole Maestri, Phil Wahba and Dhanya Skariachan; Editing by Michele Gershberg, Lisa Von Ahn, editing by Matthew Lewis)