Marks & Spencer has raised hopes that it has finally rediscovered a winning formula. Yesterday, it reported a rise in annual profit for the first time in four years and its intention to return excess cash to shareholders.

Sainsbury predicted no let-up in the difficulties facing the UK supermarket industry, taking the shine off a better-than-expected Christmas quarter.

Next joined UK retailers John Lewis and House of Fraser in the battle for festive business.

Debenhams, the UK’s second- largest department-store chain, became the first victim of increased holiday discounting by Britain’s retailers as it said profit will drop in the first half of the financial year.