“It’s not Armageddon, it’s a recession.” The words of Simon Wolfson, Next chief executive, should become a mantra for retailers – and investors. Christmas trading was the toughest for a generation, and things will get worse. But recession, unlike Armageddon, produces winners and losers. Next and Debenhams, which kicked off the Christmas trading statement season on Tuesday in relatively positive fashion, provide an instructive compare-and-contrast. Debenhams, which has a tradition of offering promotions, went all out with aggressive pre-Christmas discounting. Sales beat forecasts by declining only 3.3 per cent year-on-year in the 12 weeks to January 3. Tight inventory and cost control left its gross margin flat and profits up, year to date.

But Next kept its price discipline while all about it were losing theirs. That left like-for-like sales down 7 per cent for the five months to Christmas. Based on previously released figures, that implies double-digit declines in November and December. But similarly stringent inventory control left it with less stock to discount post-Christmas than last year, its gross margin probably higher, and on track to meet profit forecasts.