Retailers' tidings of comfort and gloom

After a lacklustre start to the holiday shopping season, retailers are pinning their hopes on the next six days. But it may be too late for some. Susie Mesure provides a guide to the likely Christmas winners and losers

THE WINNERS

Marks & Spencer

Top of the Christmas tree this year is Marks & Spencer. The retailer has had to worry more about keeping up with demand than shifting stock. Its party dresses have proved especially popular and come January, Stuart Rose, the chief executive, is finally expected to start shouting about the retailer's long-awaited "recovery". Half of its business is food, which has helped because shoppers have proven increasingly willing to splash out on expensive edibles in recent months.

John Lewis Partnership

The department stores-to-Waitrose group is another Christmas cracker for 2006. Its sales just keep on building and the department stores arm is enjoying record week after record week. In the past seven days it took £98m and people still keep shopping. In today's discount-dominated times, people seem to like the assurance that comes from buying goods at John Lewis, not to mention the quality of customer service and range of products. Again, Waitrose has benefited from being in the right food-retailing niche.

Tesco

Is there no stopping the Tesco tsunami? The supermarket chain is in better shape than ever, what with so much momentum from its teeming non-food business. Sales from lines such as clothing and electronics are soaring, putting pressure on smaller rivals. Its beefed up Tesco Direct website has tapped into the growing craze for shopping from home. The number of lines available is still modest but the venture serves to underscore the scale of Tesco's ambitions.

J Sainsbury

The big theme on the culinary scene this year has been how healthy eating has gone mainstream. Sainsbury's has positioned itself perfectly to ride the wave of interest in better-quality food through its focus on fresh ingredients and organics. Its sales lead the industry, although Justin King, the chief executive, is justifiably nervous about the chain's tough comparisons. Unlike Tesco, Sainsbury's doesn't have the luxury of a big, non-food business to drive its top line and footfall. But the few lines it does have are popular.

Home Retail Group

The newly born retail conglomerate comprises the catalogue chain, Argos, and home improvement group, Homebase. Argos's quest to grow its online business offers HRG the most cause for hope this Christmas. Fears that Woolworths and Tesco would take a big bite out of its top line look overblown, but the outcome depends on how well the toy market - one of Argos's biggest - holds up. Consumer electronics are flying off its physical and virtual shelves.

DSG International

A tricky one. The company's Currys, dixons.co.uk and PC World stores should be among the obvious winners, given the public obsession with all things electronic. The number of households watching the Queen's Speech on a massive flat-screen television will have jumped on last year. And yet the group's margins remain vulnerable, given the deflationary backdrop. Plus every man and his dog has muscled into DSG's sphere in the past 12 months.

Asos

A tiddler but Asos is sure to be up there among the winners this year, given the backdrop of strong web-based retail sales. The internet fashion company is trading its socks off, although comparisons with last year are impossible because the Buncefield fire put it out of business.

Jessops

In theory Jessops should be up there with the best performers. Recent inflation data showed the price of digital cameras has not fallen by as much as in previous years, which should support its margins. That said, the price of digital cameras has dropped sufficiently to put them within the reach of generous present-givers. Its weakness remains at the top end. But a souped-up website should help compensate for weak high-street footfall.

Carphone Warehouse

Amid a slump in the mobile phone sector, Carphone's star seems to keep shining. Despite the acres of headlines about its push into broadband, selling phones is still its bread and butter. It's up against tough comparatives - remember last year's pink Razr? - but hopes that a move into branded phones from the likes of retro-queen Cath Kidston will take up the slack. The big risk is that people have stopped buying phones as gifts. And there is more competition from the operators who have expanded their store estates.

Alliance Boots

Another one delicately balanced, but analysts expect its strong range of cosmetics and perfumes to see its core chemist chain right. It is running its usual three-for-two promotion on gifts but this will have been built into its margin assumptions.

THE LOSERS

Woolworths

The biggest turkey so far this Christmas is Woolworths, which issued a profits warning barely a fortnight into December. Nothing seems to go right for the general retailer, not least the weak entertainment market which has been plagued by dud releases and intense discounting. Even its push into the multichannel era has backfired - it can't keep up with demand, and attempts to keep expensive delivery promises have hit margins.

Debenhams

The department store chain may rue being back in the public eye. A poor trading statement was fodder for the bears who believe it has shot itself in the foot with discount days that have undermined its pricing credibility. An underlying sales fall of nearly 5 per cent is not the best start to Christmas in anyone's book.

HMV

No one is more exposed to the bloodbath that is the entertainment market than HMV. The jury is out on its valiant attempt to overhaul its pricing structure and boost its competitiveness. Ultimately it is under intense pressure from web-based rivals and supermarket chains. This is true for its core music business and its Waterstone's arm.

WH Smith

On the cusp, but ultimately it's impossible to get excited about WH Smith because outside its travel arm - where its stores monopolise traffic in rail stations and airports - it just is not a destination store. It has limited its exposure to the weak entertainment market and has a credible book offer, but it's not a group that promises fireworks.

Next

In sales terms, Next is no angel. The fashion chain has suffered at the hands of a revived Marks & Spencer. An estate that harks back to its heyday in the 1980s hasn't helped its cause. That said, its booming Directory business, which is perfectly positioned for the new online era, will make up for some of its high-street woes. And by standing firm on its no-discount policy, it could pick up useful last-minute, full-price sales next weekend. It all boils down to how much stock it has to put into its legendary Boxing Day clearance sale - but don't be surprised if this one disappoints.