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Having already discussed this topic at length, I was planning to not comment any more but my hand has been forced. Hearing Marc Bolland, CEO of M&S, today talk about it as a new shopping trend consumers want seems rather absurd. If you ask people whether they would like to pay less for what they are going to buy, you’ll get the blindingly obvious answer “yes”. How many UK consumers have in the past been in America to shop that way?  Very very few.

Black Friday and discounting in the run up to Christmas is a proxy for the winners and also rans. Those retailers who managed to stick to their guns and maintain full prices have predominantly posted much stronger numbers than those that have not. This will become even more clear in several month’s time when the audited results begin to seep through and we get to see the margin implications.

Pandora’s box is now open and I’m sure there will be a repeat next year: the less strong, more pressured players will feel forced to join the discounters but those still strong enough will be 100% right to resist. The polarised performance numbers underline that this is not a trend driven by consumers: core customers of the strongest are still buying at full price. This is a lemming-like, if you can’t beat them join them mentality which doesn’t merely dilute performance but brand equity and trust.

This first week of the New Year will set the tone for the following 51. Earlier in the week we saw Asda announce a £300m investment in price cuts. Sainsbury’s responded with a £150m raft of price cuts. Meanwhile on the same day, we saw the announcement of excellent trading numbers from Waitrose. Later in the week saw a further example of an increasingly polarised market. Awful numbers from M&S show that its low margin food business was just about positive, while GM (dominated by clothing) was down a huge 5.8% LFL. Alongside, there was Ted Baker reporting a 22.8% increase. The market is becoming increasingly less democratic and the gap between the winners and also rans is widening progressively.

Then there was Tesco. It announced a raft of initiatives and in contrast to the previous regime, this looks like a plan held together with cohesive, complementary thinking. The business has not yet pushed the price button: the key step I think it must inevitably take on order to fully regain control over its own competitive agenda. The phoney price war is intensifying but this is still the beginning.

The key headline warnings I discussed pre-Christmas are now being born out. Christmas 2014 was generally a disappointing trading period, partly because the consumer recovery ran out of steam earlier and partly because much of the industry blindly jumped on the Black Friday and discounting bandwagon without understanding the consequences. The real impact will be seen in due course when results (and margins) are announced several months down the line. Meanwhile, poor strategic judgement of this kind will be increasingly life threatening.

What is going in retail? The industry is looking increasingly stressed. In the run-in to Christmas I described retail as being in panic mode, and the weeks since have reinforced that view. The body language and behaviour of so many in the industry betrays anxiety and uncertainty.

Black Friday has merely been the most eye-catching discount day during a year that has become progressively price-driven. Online retailers tell me they struggle to meet their revenue targets without running a promotion of some kind – what can they say to their customers if it is not tied to a price offer? Physical stores are not too different. Windows are increasingly plastered with sale offers and 2014 was by the most price-driven year in food and non-food I can ever recall.

An increasing number of retailers are feeling pressured and are less confident about their ability to reach out to customers with a compelling offer without adding the drug of price. And this is a vicious circle because the more you promote the more reluctant are your customers to buy at full price. A growing minority have tangible added value they can communicate through windows, on the sales floor and on websites. Social media and Big Data are positioned as hugely significant. Maybe they are but I mostly see retailers not really knowing what to say to their customers unless it’s about price. It is the message, not the medium, that is key.

As we welcome the New Retail Year and consider the outlook, there is the usual mixture of total unknowns and total certainties ahead. One of the latter is around price. 2014 became increasingly price-led and the New Year is certain to be even more so. In 30+ years in and around retail I have never seen a market where price is so dominant and deeply embedded in customer behaviour.

I believe there are three key drivers here. The first is economic. Household budgets are squeezed between static real incomes and rising costs. Factors like PPI payouts, dipping into savings and falling petrol prices have helped mask the underlying weakness of demand, but it’s there nevertheless. The second concerns the relentless growth in online. The internet is changing the economics of retailing and because it is a materially lower margin distribution channel, it relies far more on lower prices, promotions and discounts than its physical equivalent. The relentless growth of online retail has helped to make  the industry much more promotional. And the last key driver is retailers themselves. The expansion of value players and discounters has forced mainstream players to lower prices to compete.

The minority of retailers who have resisted the temptation to discount beyond their strategic promotional calendar are generally the ones in better shape. Those that have embraced discount days and using price cuts will find it often difficult to persuade customers to buy at full price. Each of the three divers I have discussed here will be very much to the fore in 2015.  I think there is every prospect of the New Year being even more price-driven than the last.

Tomorrow will see Next’s Christmas trading statement announced, the first from the major retailers. It will trigger the inevitable attempts to extrapolate from this an industry-wide view of business over the festive season. Next’s is always one of the more meaningful statements to emerge, and that in itself renders it unrepresentative. So many are rather variable in definitions, and making company or year on year comparisons can be misleading. Another key factor likely to mislead is that the company was one of the few not to engage in Black Friday or any other margin-damaging pre-Christmas discounting. And yet another is that Next is one of the sector’s strongest players with a very strong brand, fully integrated multi-channel strategy and a totally consistent relationship with its customers.

One of the most common errors of interpretation made with Christmas trading statements is to attach the same significance to each company. Relativity is everything. Strong numbers from a tiny player are eclipsed by weak ones from a much larger business, and vice versa. As each successive business reports, views of their significance needs to take full account of their relative size.

Next will have been one of the stronger performers. A critical element of the story of Christmas trading is of course margins. The unprecedented discounting will have huge repercussions and many will have paid a very heavy price for clawing sales forward.