Another day, another big sell-off across the retail sector with concerns over poor Christmas trading knocking more than £350 million off the value of Sainsbury’s and pushing Marks & Spencer down by £220 million.

Last week alone more than £4 billion was wiped from retail stocks amid growing fears of a prolonged spending slowdown. Tesco at £36 billion is now worth more than the rest of the quoted non-food sector combined and there is little idea about when investors’ appetite may come back.

The British Retail Consortium is expected to reveal tomorrow that while high-street sales rose in December, the pace of the growth could be just 1.5 per cent, the weakest since 2004 when the Courts furniture chain collapsed.

Marks & Spencer’s Christmas update on Wednesday will be critical to investor sentiment.

Shares in the retailer are down more than 30 per cent in the past year despite its purple patch under Sir Stuart Rose.

Sir Stuart will need to pull out another bravura performance to keep supporters on side if the figures show like-for-like sales have slipped into negative territory.

A convincing show, coupled with reassurance on margins, and it may be just enough to begin to lure some of the bargain hunters back. But 2008 already looks like a long haul.

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