Although stores did not post any records, many local retailers saw gains in sales compared with last year's numbers, as well as those of the 2002 holiday season.

At The French Cellar, a purveyor of French wines on E. Main Street, sales were up 20 percent from last December, said owner Sallie Robbins-Druian.

Los Gatos Roasting Company, a cafe on W. Main Street that also stocks coffee accessories, saw a similar increase. Based on figures for November sales, which were up 15 percent from last year, owner Terri Hope predicted comparable gains for the holiday season.

"I saw a substantially better Christmas this year," she said. "I felt like the town felt more brisk this year."

The holiday retail success comes on the heels of a yearlong push by the Town of Los Gatos Chamber of Commerce to encourage more people to shop in Los Gatos. The group annually sponsors carriage rides in the town as well as Santa Claus in the park to encourage more traffic downtown during the holiday season, but many retailers felt that the Chamber's efforts during the summer and fall laid the groundwork for the season's sales increase.

"All summer long, there were activities, music and a jazz series. It was a little more attention to Los Gatos, and so people remembered to come out during the holidays," said Hope.

The spotlight also drew attention to the role local retailers play in the town.

"They helped remind people that they are part of a wonderful community," said Margaret Smith, owner of Domus, a home and kitchen accessory store on N. Santa Cruz Avenue. "I give a lot of that credit to the town and Chamber of Commerce."

Consumer confidence also appeared to play a role in bringing shoppers back downtown. Retailers noted a renewed sense of optimism among their customers and attributed the change to a recovering national economy.

"There is a certain amount of confidence with the economy," Robbins-Druian said. She attributed the increase in the number of new customers shopping at The French Cellar during the holiday season to this new attitude.

"I think people were in an exploring kind of mode," she said.

Local residents who stayed in town to do their holiday shopping were another reason for the successful holiday season.

"We had a lot of good feedback from customers who were concerned about how we were doing and wanted to support the local businesses," said Ginger Rowe, owner of Time Out Clothing. Although the store drew some new customers, Rowe said that purchases by loyal customers accounted for most of her sales during the holiday season.

Working at the cash register at Domus, Smith talked with several customers who decided against shopping at the bigger malls during the holiday season. One customer told Smith that after wandering around Valley Fair, a San Jose mall, she realized that that most of what she wanted to buy was back in Los Gatos.

"I do have a sense that people returned home this year," Smith said.

Shoppers themselves cited the town's atmosphere as the primary reason for coming downtown during the holidays.

"It's just a quaint little town and we like to walk the streets," said Charlie Price, a San Jose resident who was walking on Santa Cruz Avenue with his wife a week after Christmas.

His wife, Teresa Price, added, "The malls are too busy and too much of a hustle and bustle."

Another shopper, Los Gatos native Katey Proefue, said that being downtown reminded her of the holiday traditions of her youth. Proefue, who grew up in Los Gatos but now lives in San Ramon, said her mother used to buy her a Christmas gift each year from Domus. Proefue brought her daughter with her this year to pass along the tradition.

"It just seems like the holidays to come back," she said.

What else were shoppers looking for in Los Gatos during the holidays? Affordable gifts. Most retailers reported that consumers snatched up reasonably priced items, forgoing expensive, unnecessary goods.

"They were off the high-end ticket, shiny, bright things," said Robbins-Druian. "Shoppers were looking to invest in something that could be shared together or consumed." Robbins-Druian, who stocked more affordable bottles of wine and other goods when the economy started to slow down two years ago, said she noticed shoppers snapping up such goods as gifts.

Popular items at the Los Gatos Roasting Company were similarly reasonably priced and functional. Cups, dishes, coffee grinders and other gifts that recipients could use were among the most purchased goods.

"Purchases weren't luxury items as much as practical items," said Hope.

Stores geared towards children's products saw some of the heaviest traffic. The Learning Game on N. Santa Cruz Avenue, which stocks educational and learning toys, saw its entire line of LeapFrog products sell out. The store had to request an emergency shipment of additional LeapFrog products to restock the shelves before the last minute Christmas rush.

Tassels, a children's clothing store on N. Santa Cruz Avenue, saw a similar rush for certain items. The store nearly sold out its selection of white faux-fur coats, said owner Coco Preaseau-Jones.

While most retailers believed that the holiday sales were a sign of better things to come, they were still cautious about their prospects for the upcoming year.

"Let us hope that we have turned the corner and we are going to move into a period of more peace and prosperity," said Smith.