A surge in Christmas spending has given one of Britain’s biggest stores a respite from the impact of the financial crisis, although experts warned yesterday that the high street faced a gloomy January.

The John Lewis partnership saw sales rise at its department stores and Waitrose supermarkets in the run-up to Christmas compared with the equivalent period the year before.

However, its sales over the final six months of the financial year were still down 1.6 per cent compared with the 2007 figures, reflecting the widespread slowing of consumer spending in the last few months of 2008.

Analysts fear that the extensive discounting on the high street before Christmas, and the size of reductions in clearance sales afterwards, mean that shoppers have exhausted their spending in a last spree before the recession takes hold.

A wave of retail failures are expected this month as faltering consumer confidence pushes ailing stores over the edge. One consultancy predicts that 440 stores, including independent shops, will go out of business in the next four months.

Despite the discounting, December figures across the retail sector as a whole were disappointing. A record 90 per cent of Britain’s 100 biggest retailers ran discounts before Christmas, according to Pricewaterhouse-Coopers. The size of the discounts also hit new levels.

But total sales across the high street fell by 5.4 per cent during the month compared with the previous year, according to figures from the accountant BDO Stoy Hayward.

The number of people going shopping on New Year’s Day fell by 9.7 per cent, the Experian consultancy reported.

The extent of the gloom could be reinforced next week when stores such as Marks & Spencer, Debenhams and Next reveal their sales figures. Marks & Spencer waged an aggressive Christmas sales campaign, with 20 per cent discounts before Christmas Day and 50 per cent immediately afterwards.

Freddie George, a retail analyst at Seymour Pierce, predicted that the company would issue a profit warning. “We believe the trading statement will disappoint,” he said. “2009-10 profits will be downgraded and the 2008-09 dividend will inevitably be cut.”

Anita Manan, senior analyst at Experian Business Strategies, said: “The depressing start to the new year comes as . . . shoppers left retailers no choice but to discount heavily prior to Christmas and soon after, leaving no excitement for the start of the new year’s sales.”

The John Lewis partnership was nevertheless optimistic that its jump in preChristmas spending would continue. Patrick Lewis, its department stores retail director, said: “The pundits who predicted it would come fast and furious in the final week were on the money. The pace has kept up at the same healthy rate for the first two days of this week.”

The 27 department stores saw sales rise by 1.2 per cent to £71 million compared with the same week in 2007 and also had a record day’s trading on December 27, the first day of their sales. Takings at Waitrose, also part of the group, went up by 41 per cent in the week to December 27, reaching £112 million – the supermarket had a record day’s trading on December 23.

Figures from the company showed that, over the past year, sales of cava were up by 84 per cent and prosecco by 44 per cent. By contrast, branded champagne rose only 25 per cent, and that was largely driven by promotions.

In the final days of last year six retail chains went into administration. Having hung on in the hope of a strong Christmas period, shopkeepers often find that they have to call in administrators in January. Banks review their lending portfolios and tell struggling firms that they will not continue to finance them, while rent bills arrive between Boxing Day and mid-January.

Analysts said the number of companies that failed before Christmas indicated how severe conditions were. Woolworths and MFI went under in November, Whittard of Chelsea, Zavvi, The Officers Club, USC, Adams and Olan Mills followed last month.

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