Retailers had a difficult day after a rash of festive trading statements from the High Street hit the market.

Tesco edged down despite reporting forecast-beating Christmas figures as worries about the competitive threat from a new force in the UK grocery sector weighed on shares.

Britain's biggest supermarket group said it saw strong sales over Christmas and New Year as customers bought DVD players, CDs and wide-screen televisions.

Like-for-like sales - which strip out the effect of new store openings - for the seven weeks to January 4 rose 4.8 per cent in its UK stores.

The group said its sales were strong when compared with rivals.

A spokeswoman for Tesco, which owns 730 supermarkets in the UK, said: "By any standards our UK sales were very strong when compared with others."

Among others on the slide were GUS, despite showing strong growth over Christmas from catalogue-shopping chain Argos.

Sales at Argos were up seven per cent on a like-for-like basis on the back of strong demand for electrical equipment and home furnishings.

Mother-and-baby group Mothercare fared worse and saw shares tumble after reporting a slide in Christmas sales. The group, which has 247 UK stores, said that in the 13 weeks to January 10 like-for-like sales in its UK stores fell 1.1 per cent.

The disappointing trading marks another troubled Christmas for the group. Last year, teething problems at Mothercare's warehouse in Daventry meant stores ran out of products over the crucial festive period.

In November 2002, the group reported half-year pre-tax losses of £10 million.

Prior to the update, analysts were forecasting pre-tax losses for the year to the end of March of about £6 million. Shares slumped 15 per cent in early trading.

Fashion retailer New Look also saw shares dive as the City worried about margins after Christmas figures showed shoppers put off purchases until the sales.

Like-for-like sales in its UK stores were up 5.1 per cent for the seven weeks to January 11 but margins were 1.3 percentage points below the previous year.

Shares in the group, which has almost 500 UK shops, tumbled nine per cent after the update.