One of the many benefits of the free market is its ability both to identify winners and losers – and to bring about change. Aside from planning issues, the UK retail sector is more dependent than most sectors on the operation of the free market. If you think Tesco is overcharging you for its pork pies, you can wander off to Sainsbury’s or to Morrisons and buy them there.

The Christmas period is producing some interesting financial results. The high quality John Lewis business is booming - reporting some deeply impressive figures. Whilst Marks and Spencer’s Christmas revenues were broadly in line with expectations, HMV - the owners of Waterstone’s – is undoubtedly struggling. Its recent trading performance has been seriously lacklustre.

January 13th is the retail sector’s equivalent of Super Thursday, with a swathe of retail companies providing a market update. By far the most important was Tesco, which supplies c30% of UK groceries. Its like-for-like UK sales performance, compared with the back-end of 2009, was disappointing – a rise of just 0.6% excluding fuel sales.

As such, it seems that both Sainsbury and Morrison are slowly cutting back Tesco’s market dominance. Dixons’ numbers were poor, hardly surprisingly given the reliance on the electronic goods market – always a difficult sell during hard economic times. Argos-owner Home Retail Group also disappointed.

Of course, the like-for-like sales data excludes comments on operating margin changes; this trend will become more apparent over the coming weeks. Many retailers, including Tesco, have blamed bad weather, especially in the north of England, for their poor figures. The next few months will be very challenging, with rising unemployment and the recent increase in VAT to 20%.

As these figures are dusted down, all major retailers will be analysing where their performance could improve. Is this not the true dynamism of free markets?