The resurgence of High Street giants Marks & Spencer and Woolworths remained on track after both reported healthy festive trading figures.

Tough conditions in the retail sector had put the two recovery stories in danger but those fears proved ill-founded in the wake of sales updates.

M&S, which saw an upturn in fortunes in 2002, said it enjoyed a good Christmas with like-for-like sales up 6.7 per cent in the seven weeks to January 11.

The optimism was shared at Woolworths, where the recent trend for like-for-like sales growth continued in the six weeks to January 11 with a 1.5 per cent lift.

The group, which is in the early stages of its recovery strategy, now expects a "significant improvement" in profitability in this financial year.

Shares in Woolies - best known for its CDs, kids toys and pick n' mix sweets - rose sharply but M&S fell amid fears over margins.

It was joined on the way down by a clutch of retailers who had found the going tougher over the Christmas period.

They included JJB Sports, which said that margins had suffered after it was forced into price discounts in order to clear winter ranges.

JJB operates from 444 stores and also has the TJ Hughes discount chain, which it said had improved its performance over the festive period.

Shares in Matalan, another cut-price retailer, were also down after announcing that sales rose just 1 per cent over Christmas.

Clothing retailer Austin Reed warned that profits would fall below expectations after seeing festive sales slide but toy retailer Hamleys proved the magic of the Christmas season was still alive with sales up 6.1 per cent.