The worst seasonal figures from Tesco in memory sent grocery stocks into tailspin but general retailers, despite some disappointing updates, outperformed the All Share index.

Shore Capital shifted stance on Tesco from a long-standing buy to hold. The broker described Tesco’s update as a “major disappointment” and said that downgrades “reflect not just poor recent trading but a build-up of matters, particularly in the core chain”.

Bernstein still rates Tesco an outperform. The broker said the near-term cost of Tesco’s investment in improvement was disappointing but the fall in the retailer’s share price means there is “good valuation upside from current levels”.

Online grocer Ocado, whose valuation has been under the cosh following post-IPO disappointments, was the week’s biggest riser after its update pleased the City.

Panmure analyst Philip Dorgan, a frequent critic of Ocado, said its seasonal trading had been better than expected, but he remained a seller. JP Morgan Cazenove, which is neutral on the stock, said: “We have higher conviction on the business’s ability to ramp up growth once capacity improvements are made in the coming months.”

Electricals group Dixons also rose strongly. Although conditions remain tough, analysts were reassured about prospects. Seymour Pierce cut its target price but maintained: “Dixons is the last man standing in its two core markets and we believe there will be upside in the share price when consumer confidence returns.”

Investec reiterated its buy recommendation on luxury retailer Burberry, despite some City concerns about levels of growth in the Americas.

Buy Ted Baker, advised Espirito Santo after the idiosyncratic fashion specialist impressed over Christmas with sales ahead of expectations and its international growth potential. The broker noted: “We expect management to test markets carefully and build the brand presence prudently, but there is no doubt a greater degree of confidence about the brand’s growth potential now, particularly in the US.”

Home shopping group Findel’s update showed “excellent progress”, broker Singer said, describing the retailer as “an exciting recovery play” trading at only four times’ earnings. The broker said: “Findel is one of the few turnarounds in the sector that is both profitable and has secure funding in place.”

The bulk of the trading updates are out of the way, but WHSmith will report next Wednesday. Chief executive Kate Swann usually manages to deliver profits from declining sales and the likelihood must be more of the same.

Investors will now weigh up the announcements of the last weeks and make their judgment calls on the outlook for the sector and its companies.