Debenhams joins price war as High St heads for a £1bn discount frenzy

Britain is heading for a £1 billion pre-Christmas price war as Debenhams today joined the big supermarkets in a discounting frenzy.

The department store chain is to cut £250 million from prices on fashion, cosmetics, homeware and toys in its biggest ever pre-Christmas sale.

The move follows £400 million of reductions from Tesco and Asda, with Morrisons and Sainsbury's also pushing through big reductions.

It will test the resolve of big chains such as Marks & Spencer and Argos to hold their nerve and refuse to discount through December.

Michael Sharp, Debenhams' deputy chief executive, said: "Customers continue to feel the pinch in this recession. They want us to reduce prices now, so that is what our Christmas spectacular will do."

Last year a similar announcement from Debenhams - when it cut prices by £200 million - was swiftly followed by a one-day spectacular from M&S.

Competition has been particularly intense on toys after the collapse of Woolworths a year ago this week, with major chains vying to grab market share through eye-catching deals.

The Debenhams sale will last four days from Wednesday. Stores will open extended hours from 8am to midnight on Wednesday and Thursday.

However, despite the huge reductions analysts said the High Street is generally in far better shape than last year when the sudden collapse in spending during the banking crisis left chains with mountains of unsold stock.

But they would not rule out more fashion chains cutting prices as Christmas approaches, particularly as mild weather is likely to be depressing sales of coats and jumpers.

Britain's celebrity obsession has boosted sales at website Asos, best known for cut-price replicas of outfits worn by the famous. Turnover leapt by almost half to £96.5 million in the six months to the end of September.