General retail stocks began the year in deep freeze as the reporting season got under way.

Year on year, general stores were down almost 4% at the end of trading on Tuesday and before a shock update from HMV. The entertainment group revealed that group like-for-likes were down 10.2% in the five weeks to January 1 and declined 10.8% in the 10 weeks to the same date.

HMV is to close 60 stores, warned that profits will be at the low end of expectations and flagged a “tight” covenant test approaching in April. Arden analyst Nick Bubb, who has been a supporter of HMV, switched his stance from add to neutral. He said there was likely to be a “big pruning” of the final dividend.

Espirito Santo - formerly Execution Noble - stuck to its sell advice and noted: “While the difficult trading is likely to come as no surprise to the market, the precarious balance sheet position is likely to put further pressure on the shares.”

Fashion giant Next calculated that the snow lost it £22m in full-price sales but full-year profit will meet expectations and come in between £540m and £555m.

Peel Hunt said Next was its top pick among FTSE 100 retailers but admitted: “Reflecting consumer uncertainty, we see no reason to chase the shares at this juncture and reiterate our hold stance.”

Investec slashed its price target for Next from £23 to £20 and cut its profit forecast for 2012 in light of rising prices, which could put pressure on like-for-likes and market share.

Altium rates Next a buy and said: “The shares look good, if unexciting, value but we suspect that Next will continue to do slightly better than management’s guidance.”

Food retailers started the year in better share price shape than their generalist counterparts - up year on year almost as much as general retailers were down.

Online specialist Ocado led the pack. For the first time since its flotation last year, Ocado’s share rose above the IPO price of 180p to reach 196.7p. The etailer is expected to issue its Christmas update on Monday and sales growth of as much as 30% is anticipated by analysts.

JJB Sports has won backing from leading investors as it battles for recovery. Before Christmas the retailer unveiled a £31.5m fundraising backed by investors including a Bill Gates vehicle. There has been speculation that the retailer will attempt to raise more money.

The January updates will now come thick and fast, dictating sentiment towards the sector in what many fear will be a difficult year.