Electrical retail group Dixons reported below-expected Christmas sales, with like-for-like turnover in the Republic falling 3 per cent. Dixons, which owns the Currys and PC World chains, blamed a slowdown in the Irish economy for the downturn, but said the opening of two outlets in Limerick fuelled a gross rise in sales to €39 million from €3 million.

Meanwhile fashion retailer Next, with 330 outlets in Ireland and Britain, said Christmas trading was tougher than predicted but expressed confidence that full-year profits would match analysts' forecasts of €450-€465 million.

Next's like-for-like sales in Ireland and Britain climbed 1.7 per cent in the half year to January 4th with total retail turnover increasing 12.4 per cent.

Shares in Dixons plunged 20 per cent in London after it said profits would be lower than predicted.

The group, which announced interim pre-tax profits up 8 per cent to €145 million said: "With an increasingly uncertain economic outlook and consequent risk to consumer confidence, we are cautious about the near-term outlook for our markets. We therefore expect that results for this financial year will be below current market expectations."

Dixons, forecast to make profits of €490 million, could see the pre-tax line come in at about €460 million. Last year, annual profits were €433 million. Group retail sales for the eight weeks ended January 4th were up 21 per cent in total , boosted by a first-time contribution from the consolidation of UniEuro in Italy. But the like-for-like figure, was up just 1 per cent.