Department store Debenhams has warned profits will be taking a hit after shoppers ignored price cuts in the Christmas sales.

In a trading update brought forward from next week, the retailer said UK like-for-like sales tumbled 2.6% in the 17 weeks to December 30, with overall group sales down 1.8%.

Slashing prices over the festive trading period brought mixed results, it said.

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Its “tactical promotional action” helped group sales improve over the six-week Christmas period, rising by 1.2% on a like-for-like basis, but it saw worse-than-expected trading in the first week of the post-Christmas sales.

Its share price fell 20% in morning trading on the news.

Debenhams warned that “should the current competitive and volatile environment continue” into the second half, full-year profit before tax is likely to be in the range of £55 million to £65 million.

This comes after profits for the year to last September slumped 44% to £59 million.

The group said it was ramping up cuts to the business, with around another £10 million savings earmarked for this financial year under a reorganisation being led by chief executive Sergio Bucher.

Bucher revealed plans in April to close 11 warehouses and put up to 10 stores under review, in a move affecting at least 220 jobs.

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Bucher said: “The market has been challenging and particularly promotional in some of our key seasonal categories and we have responded in order to remain competitive for our customers, which has impacted our profit performance.”

But he insisted the group was seeing “positive early signs” from his turnaround.

“The market dynamics we have seen have reinforced our view that we need to move even faster to implement the cultural and organisational changes needed to ensure Debenhams is in the best possible shape for today’s fast-changing retail environment,” he added.

Debenhams’ fortunes are in contrast to those of Next, which earlier this week posted a surprise rise in sales, boosted by cold weather ahead of Christmas.

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Sales at the clothing retailer rose 1.5% – far better than the 0.3% fall it had expected. A 13.6% rise in online sales offset a 6.1% decline in store sales in the 54 days to 24 December.

The picture for UK retailers and shops in general is patchy, to say the least. In a report published last month, insolvency advisory company Begbies Traynor said 44,000 retailers were showing signs of “significant financial distress” going into 2018.

The followed the last-ditch pension fund deal which saw Toys R Us secure the short-term future of 3,200 British jobs.