Plummeting sales at Woolworths and a gloomy CBI survey kept the downward pressure on store shares, but a better-than-feared update from Next and director share buying at Marks & Spencer provided some reassurance.

Dresdner Kleinwort downgraded Woolies from hold to sell after Tuesday’s dismal update, when investors were disappointed by the decision not to sell 2 Entertain, as well as a steep sales fall.

The broker said: “A sharp decline in the sales trend, combined with no improvement in gross margin and higher-than-expected cost pressures means Woolworths will struggle to break even at the group level this year.”

Hold Next, advised Seymour Pierce after Wednesday’s update. Next’s powerful Directory business is not recognised in the retailer’s share price, the broker maintained and said: “The update demonstrates management’s good track record of managing margins and costs.”

ING initiated coverage of M&S with a sell note and 200p price target. Structural problems at the food division and the soft clothing market made the broker bearish.

“The company needs to aggressively scale back its UK spending commitments and return the underlying UK business to positive like-for-like growth while increasing its focus on emerging international markets,” noted ING. However, M&S deputy chairman Sir David Michels nailed his colours to the mast by buying 47,500 shares.

Dunelm has acquired bed linen and soft furnishings brand Dorma for£5 million. It said the deal would strengthen its specialist proposition. Landsbanki, a long-standing fan of Dunelm, said the deal would cement the retailer’s authority in soft furnishings and that its shares offered “excellent value”.

Travis Perkins reported flat interim EBIT of£31.3 million at its retail arm, comprising the Wickes and Tile Giant chains. Total sales rose 6.3 per cent in total, but like-for-like sales per trading day fell 1.1 per cent at Wickes and 3.3 per cent like for like by volume in core products.

The Qatar Investment Authority nudged up its stake in Sainsbury’s to 27.3 per cent, once again prompting speculation about a renewed bid attempt.

JP Morgan believes Morrisons is the most likely buyer of a tranche of Somerfield stores likely to be sold by new owner Co-op.

About 200 shops may be of interest to Morrisons. The broker said: “In strategic terms, the acquisition makes sense and gives the Morrisons story momentum.”

As August begins, market news is likely to slow down. Next week, however, updates from Signet and Carpetright are scheduled. The latter should be especially interesting, giving a snapshot of the troubled big-ticket, home-related retailing market.