Retail bellwether Next offered a snapshot of Britain's austerity Christmas today after admitting to "disappointing" sales in November and December.
Last-minute festive purchases failed to prevent sales at its 520 stores from falling 2.7% on a year earlier between August and Christmas Eve, even though comparisons were easier due to the previous year's Arctic weather.
Consumers showed a greater appetite for the retailer's end-of-season sale, when goods were at half price or less after Next was left with 10% more stock in its clearance period than a year earlier.
Next will still meet profit targets for the year to January but the company's festive performance and cautious outlook caused its shares to fall by around 4% today. Rival stocks, including Marks & Spencer, also slipped.
Chief executive Simon Wolfson described the mood of the consumer as "subdued".
He added: "I think people are just saving money. We have not seen anything like the spending after Christmas that would make up for the lack of spending before Christmas.
"It's not that people are spending at a different time - they are spending less."
He said Next would not abandon its policy of only putting on discounts in end-of-season sales and would continue to focus on profitability.
It also had some good news for consumers as it does not expect to hike prices this year after cotton and wage costs caused prices to rise in 2011.
The company predicted that the squeeze on consumers will ease this year, particularly in the second quarter, with inflation closer to average wage growth. But it warned that the eurozone crisis and rising unemployment would continue to drag on confidence.
Next said the final week of trading before Christmas had been strong but overall shop sales in November and December were "disappointing" as it refused to take part in the frenzy of promotions.
In contrast, its Directory business enjoyed 16.9% growth, while the post-Christmas sale went well, according to Next. Total sales for the Next brand were 3.1% higher between August 1 and December 24.
It said: "A number of factors have subdued sales in the final quarter and it is hard to judge to what extent warm winter weather and higher levels of competitor discounting masked the deeper, longer-lasting economic effects."
The group, which has been one of the best-performing stocks in the FTSE 100 Index over the past year, narrowed its 2011/12 profits guidance to £7 million either side of £565 million, which would represent a 4% increase on last year.
However, profits in the following year are likely to only show a slight improvement amid challenging conditions for consumers.
Peter Smedley, an analyst at Charles Stanley, said some forecasts for next year were likely to trimmed.
But he added: "Even in a very tough clothing retail market characterised by higher levels of competitor discounting, Next's no-discounting policy looks to have held up well again."