Two of the high street's biggest names emerged as early winners from the festive season today as shoppers shrugged off the recession.

Department store chain John Lewis toasted a record-breaking £500 million in sales during the five weeks to January 2, while fashion retailer Next hiked profit forecasts after better-than-expected trading.

John Lewis enjoyed "excellent" trading, while Next said fears of a consumer meltdown had been overblown as consumers were aided by record low interest rates and lower-than-expected unemployment.

Both companies are cautious over 2010 amid looming tax hikes, while this year's trading figures have been flattered by comparisons with the worst depths of the recession a year earlier.

But the updates throw down the gauntlet to major players such as Marks & Spencer and Sainsbury's, which report tomorrow and Thursday respectively.

The UK's biggest online and home shopping firm, Shop Direct, also cheered a strong Christmas trading performance across brands including Woolworths.co.uk, Littlewoods, Kays and Marshall Ward.

John Lewis said its department stores broke a series of records and saw sales break the £100 million barrier for four of the five trading weeks, including the most recent week to January 2.

There were also signs that consumers were more willing to splash out at the partnership's Waitrose supermarket chain, where sales were up more than 20% in Christmas week.

Singer analyst Mark Photiades said: "This performance is clearly very strong and a stellar achievement given the economic backdrop at the start of 2009."

But he also warned against reading too much into prospects for the rest of the high street from the John Lewis figures, where spending by foreign tourists making the most of a weak euro is likely to have boosted sales in its London stores.

Next grew like-for-like sales 3.2% in the 22 weeks to December 24 in a "more stable than expected" consumer climate and now expects full-year profits of between £490 million and £500 million - ahead of its November guidance.

Sales were helped in the final two weeks before Christmas by the colder weather, although the group improved its ranges and gave more space to home furnishings which performed "particularly well".

But shares in the company, which has more than 500 stores, dipped more than 2% following the update as markets also digested the company's uncertain outlook for 2010.

While consumers "are generally in a much better position than they were a year ago", Next said the year ahead may not be as good as action to sort out the country's dire public finances bears down on shoppers.

Next added that possible tax hikes, Government spending cuts and rising interest rates could hit consumers as the UK labours under a record £178 billion borrowing bill.

"The scale of the public sector deficit poses a real threat to recovery," the company warned.