Retail stocks continue to dominate the City agenda next week when some of the sector's biggest names report Christmas sales.

The mood of the consumer should then be easier to judge with investors hoping that Dixons' recent profits warning proves to be a one-off.

Trading figures from Marks & Spencer on Wednesday should be one of the most keenly watched.

The Christmas trading season will also be a first major test for Roger Holmes, who took over as chief executive from chairman Luc Vandevelde in September.

Analysts believe it is unlikely that M&S will match the growth rates seen in its most recent quarter and NatWest Stockbrokers is forecasting Christmas trading growth of seven per cent in general merchandising and 3.5 per cent in food.

Sainsbury's boss Sir Peter Davis could be pressed over speculation it is preparing a counter bid to Morrisons' £2.9bn takeover of Safeway when he presents Christmas trading figures on Monday.

Reports that Sainsbury's may team up with Asda owner and US giant Wal-Mart are likely to put news of the festive period into the background as analysts judge whether a bidding war for Safeway will emerge.

Sainsbury's is forecast to produce solid like-for-like sales growth of between four per cent and 4.5 per cent for Christmas and New Year, compared with the 6.8 per cent enjoyed during the consumer boom 12 months ago.

Tesco gave an insight into its performance over Christmas at the end of last month with figures showing its internet arm took a record of more than £10m a week during last month.

Analysts believe Tuesday's figures will show like-for-like sales rose by as much as five per cent on a year ago.

Woolworths could be the surprise package of the festive trading season when it reports figures on Wednesday as consumers are likely to have shopped more carefully in the face of tougher economic conditions.

The company generates a large slice of its sales over the Christmas period and vowed in September that it would be better prepared than last year after recruiting an additional 6,000 staff and adding 800 tills.