Fears are mounting that this Christmas could be disappointing for retailers as the weather, deep discounting and low wage growth impact festive spending.

In a note entitled Christmas Jeer, Oriel Securities analysts Jonathan Pritchard warned fashion retailers are likely to be among the worst affected as factors combine to deplete clothing sales.

Pritchard said consumers are “choosing to spend only when forced” and a “lacklustre” October and November in fashion had been caused by milder weather.

He said: “Both the breadth and depth of discounts throughout late November and into early December suggest it is the retailers that are losing their nerve in that stand-off.

“Faced with unsold stock the likes of Marks & Spencer, Debenhams, LK Bennett, Hobbs and Jaegar are offering 20% to 50% off in order to attract reluctant shoppers. Retailers are judging that stock cleared at this level of discount before Christmas may avoid more damaging and deeper discounts in January. It’s a gamble with only one winner, the consumer.”

He added that a pick-up in the housing market may divert spend away from the clothing sector.

Oriel downgraded M&S, Debenhams, Mothercare, Next and Sports Direct. Slow overall growth in the grocery market, according to Kantar Worldpanel, caused Tesco, Sainsbury’s and Morrisons’ share price to fall yesterday.

However, Pritchard said retailers including Supergroup and JD Sports are likely to have a strong Christmas while Dixons is well placed to take advantage of a predicted “electricals Christmas”.

Pritchard said: “We are far from convinced that any increases in consumer confidence in 2014 will be sufficient to give turnovers the boost they need to aid operational gearing and deliver forecasts.”

Next Monday and Tuesday are expected to be significant shopping days as consumers take the entire week off work and make a late dash to complete their Christmas shopping.