A week ago Sir Philip Green, boss of BHS and Arcadia, was predicting that “Christmas will come for retailers – it always does, but next year, it will be falling off a cliff”.

The savage price cuts in the past 24 hours everywhere from Tesco to Harrods suggest that Sir Philip’s doom-laden description for the state of the high street in 2009 might be an apt summary of current conditions.

It is scary out there in the shopping centres and high streets. Stores could be facing their first year-on-year drop in Christmas sales since the British Retail Consortium (BRC) began compiling figures 14 years ago.

Midweek figures from Experian show a decline of 6.2 per cent on the same period last year but Experian points out that consumers could hit the high street after the final delivery dates for internet purchases have passed.

It also appears that shoppers are either being entirely confused by the profusion of discounts and promotions or are postponing their Christmas present buying in the hope that 50 per cent off signs will, within days, be as commonplace as the pop hits of Christmas past now playing in most stores – which could be one reason why shoppers are staying away.

As a result, in the new year, these shopping destinations could be blighted by unsightly empty outlets as heavily indebted names fail because they can not appease their landlord demanding his rent on Quarter Day December 25, or placate the bank. This is the Christmas not of cheerful “Yo-ho-ho”, but of the fearful “Oh, no, no”.

This week BRC figures showed that the value of total retail sales fell last month by 0.4 per cent from a year earlier, after a 0.1 per cent year-on-year decline in October. That is the first back-to-back drop in total sales since the BRC survey began in January 1995 and has fuelled fears of a sharp retreat from the shops by consumers.

A BRC spokesman said: “At this stage it’s hard to tell if people are staying away because they’re cancelling or postponing their shopping. We have seen people getting closer and closer to Christmas before they go shopping in the past few years. Retailers are hoping that people are just holding out until this weekend or next before they commit to a purchase.”

To date, the only retailer who has questioned the discounting is the brave Andy Bond, chief executive of Asda, who criticised the current spate of sales yesterday. He told The Times: “The best thing for consumers and for business is to keep prices low all year.”

Others might agree in private but most cannot withstand the pressure to join the fray. Even the upscale names are sticking up the money-off posters in their Christmas windows. Harrods, famous for its sales in January and July, has had a 10 per cent off weekend and is offering up to 50 per cent discounts on its homewares.

A few are standing apart, including Selfridges, which yesterday declared that it planned to keep prices at presale levels until its Boxing Day sale. The American-owned fashion retailer Abercrombie & Fitch, which has its UK flagship store on Savile Row in Mayfair, intends to keep to its policy of never holding a sale.

The store, described by one detractors as “Gap in a club”, is crossing its fingers that its combination of jeans, hoodies and buff sales assistants will wow teen and twentysomething consumers who can be pictured in the store’s lobby next to a topless male model. But A&F’s sales in America last month were dismal, amid the widespread discounting at competitors. This may be the Christmas when the male model’s pecs just do not cut it as they did before.

The British middle market has been the scene of some of the most vicious discounting. John Lewis has begun a sale in response to cost-cutting at Debenhams and House of Fraser. Debenhams has had 20 per cent off for 14 out of the past 21 days, while House of Fraser has 50 per cent off some lines.

Marks & Spencer is offering four-for-three deals on all party food and cutting the price of women’s coats, knitwear and children’s clothing by 20 per cent, after two 20 per cent off days in the past few weeks.

Any British retailer feeling sore this morning can take some comfort in the knowledge that the pain is being felt elsewhere. The usually unassailable Inditex, owner of Zara, yesterday recorded lower-than-predicted third-quarter sales as it performance was dented by the housing market and other economic woes in Spain, where half of its 4,000 stores are based.

Inditex’s sales in the quarter rose 11 per cent to €2.79 billion (£2.4 billion). Net income rose 1.2 per cent to €437 million in the three months to October 31. All that may sound good but was lower than the expected €465 million average income that analysts had predicted for the group that made its name from quick turnaround copies of catwalk looks.

At Zara there will be plenty of reduced Balenciaga-influenced party frocks, but no one is in the mood to party.

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