Five John Lewis stores saw sales fall by more than 20% last week as the department store chain faced up to heavy discounting by rivals.

The group, which has a major store at Touchwood in Solihull, revealed a 23% drop at Nottingham in its weekly trading update, while outlets at Peterborough, Reading, Bristol's Cribbs Causeway and Peter Jones in London were also down by more than a fifth on a year earlier.

The Solihull store reported a 16 per cent drop in sales.

John Lewis disclosed on Sunday that sales across the division were down by more than 13% in the week to last Saturday. The period saw rivals Marks & Spencer and Debenhams hold discount days in a bid to drive footfall in the run up to Christmas.

Despite the increased competition, John Lewis merchandise director Jill Little said the chain held its own during the week, particularly in fashion after matching the price cuts on branded lines.

She said: "A week of high profile competitor reductions give an indication that most retailers are finding themselves in tough times. Throughout this, we can remain confident in the honest pricing strategy we have always delivered for our customers."

The group's fashion department provided the best performance in the week, with sales down by 7.7% on a year earlier. Electricals and home technology dropped 13.2% and Home revenues slumped by 19.6%.

One of the week's best sellers was Biscuit the Dog, a life size electronic toy retriever puppy which John Lewis said had sold in record numbers.

At supermarket chain Waitrose, which is also part of the John Lewis Partnership, sales were down for a second consecutive week - off 3.9%.  Despite this week's VAT reduction and the cutting of interest rates, IHS Global Insight economist Howard Archer said the retail sector still faced a very difficult Christmas period.

He added: "We suspect that there will be a lot more discounting, special promotions and flash sales right up to Christmas to try and get hard pressed consumers to spend. It is also likely that there will be some extremely attractive bargains in the New Year sales."