RETAILER Woolworths was yesterday the first to report a tough Christmas season after sales of toys and blockbuster DVDs failed to meet expectations.

It said sales of movies, such as Shrek 2, pictured, and Spiderman, had been affected by increasing levels of DVD piracy.

The company described its performance as disappointing, with like-for-like sales at its core estate of 806 shops unchanged from last year.

Shares in the FTSE 250 company fell five per cent as Woolworths indicated full-year profits were unlikely to be better than last time.

Analysts are braced for more bad news from the sector as a number of Christmas trading statements are scheduled for the next fortnight.

Analysts will be looking for admissions of poor performance after regulators told retailers to disclose worse-than-expected figures early.

Rising consumer debt and five interest rate rises have led to fears the UK's retail sector might have suffered a poor festive period.

Woolworths had been due to release its update next week, but brought it forward after realising profits forecasts were too high.

While like-for-like sales were unchanged at the main estate in December, Woolworths said the sales fall at its big W out-of-town chain had been eight per cent and 4.7 per cent at the music retail business MVC.

The decline at big W was attributed to its exit from a number of non-core areas, while MVC suffered from an "unusually" high number of rival store openings.

Next week, the British Retail Consortium's retail survey for last month will provide an overall indication of high street sales.

Next is expected to report that sales continued to grow, although at a slower pace than last year.

The trading statement from Next will be followed during the next two weeks by Morrisons, Dixons, Tesco and Boots.