General retailers were the week’s beneficiaries as they outperformed their food peers and the FTSE. Lower interest rates were welcomed, but analysts remained downbeat about prospects.

Kaupthing worried that shoppers might save rather than spend next year. It said: “We see a scenario where the savings ratio rises in 2008 as being extremely damaging to retail expenditure, possibly resulting in a year-on-year decline of more than 5 per cent.”

Sainsbury’s shrugged off a fine over milk price fixing to rise over the week and Morrisons was also up on strong TNS data. JP Morgan was disappointed by Tesco’s TNS growth and recommended being short on the giant grocer.

Citi was bearish about Marks & Spencer’s TNS food performance. The broker said: “While all the other retailers are pulling out of the summer lull thanks to more seasonal weather and easier comparables, M&S looks stuck in the mud.”

Pali International initiated coverage of M&S with a “cautious neutral” recommendation and said it preferred Next. M&S’s rising debt and capital expenditure worried Pali, which said: “M&S is a strong brand with defensive merits, but there is downside in the valuation if like-for-like sales start to disappoint.”

Lehman Brothers reiterated its outperform recommendation and price target of 169p for HMV following Wednesday’s interims. “Strong cashflow generation and a reduction in net debt adds weight to the turnaround story,” it noted.

Investec, however, advised sell on the back of “many uncertainties and risks”. It said: “The shares remain very heavily shorted, reflecting the view that HMV is strategically challenged as its markets shift.”

Fashion group Alexon warned on profits, prompting Panmure Gordon to cut its price target from 175p to “an arguably generous” 90p. Sell, urged the broker. Despite a profit warning, Moss Bros surged as investor Baugur confirmed it may launch a bid for the menswear retailer.

Sports Direct issues maiden interims next week, when an EGM will also be asked to sanction more share buy-backs. The results will be seized upon by analysts concerned at the maverick behaviour of founder Mike Ashley since the retailer’s IPO.

The week brought changes to the make-up of the market. Electricals group DSGi was expected to be shown the door from the FTSE 100 as Retail Week went to press. While Monsoon proceeded with its delisting from AIM, ethical fashion e-tailer Adili joined the junior market. Adili’s shares were placed at 17.5p, giving it a capitalisation of£4.5 million.

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