High street retailers Next and Debenhams have announced falls in like-for-like sales over the Christmas period, suggesting the credit crunch had a severe impact on consumer spending.

Clothing retailer Next said sales had dropped by 7% in the six months to Christmas Eve while Debenhams saw a 3.3% fall in sales over the past 12 weeks.

Both companies warned that trading conditions were likely to remain tough for the whole of 2009 as the recession took hold.

The chains are offering up to 70% off items in their January sales in a bid to encourage spending.

Other retailers will announce their half-year results later in the month, which are expected to show a similar trend.