Supermarkets, retailers and pubs are going to war over the pound in your pocket

Despite slamming Tesco and other supermarkets for heavy discounting before Christmas, ASDA has joined the war by cutting prices at 350 stores on 1000 lines to a pound each.

The price cuts come ahead of a crunch time for retailers who need to shift Christmas stock now to provide cash flow for new stock in coming months.

The problem is prices were dropped so low before Christmas; many retailers have nothing to discount and nothing new to attract shoppers through their doors for January sales.

According to the latest footfall figures from Experian, the number of shoppers out now is almost 10% down on the same day last year.

"The depressing start to the New Year comes as a nation of savvy shoppers left retailers no choice but to discount heavily prior to Christmas and soon after, leaving no excitement for the start of the New Year's sales," said Experian.

Off the high street, the price of a pint is now 99p at pub chain JD Wetherspoon - the cheapest since 1989 - and the price of a meal is £2.99, putting pressure on other pub chains to force down prices when custom is slowing.

City experts warn that even if the sales go well, rising unemployment and a deepening recession lead to more belt-tightening.

John Lewis reported takings up in the lead up to Christmas and a record first day of the sales. Department stores recorded their first sales increase since September in the week to last Saturday, rising by 1.2% year-on-year. Food chain Waitrose, also owned by the group, had a 40.6% surge in sales.

Other retailers will start releasing sales figures for Christmas next week. Next and Debenhams put theirs out on Tuesday, followed by Marks & Spencer the next day.