Sales at discount fashion chain Primark soared by 18% in the last quarter while Homebase and Argos suffered drops.

Primark tills were ringing over Christmas period

Shoppers appeared to turn to cheaper clothing alternatives as the credit crunch hit home during the festive period.

"Trading at Primark was strong and over Christmas was ahead of our expectations," Assocated British Foods said in a statement.

"Sales were 18% ahead of last year reflecting the increase in retail selling space and very good like-for-like sales growth."

Primark is known for its super-cheap clothes and now has 187 stores in the UK.

But the company is investigating claims one of its UK suppliers used illegal immigrants paid below the legal minimum wage.

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Like-for-like sales were down 7.5% at Argos, which runs 700 UK stores, and down 10.2% at Homebase, which runs 350 stores, in the 18 weeks to January 3.

Home Retail, which runs both companies, said it was considering axing 350 jobs.

Mothercare posted a 4.2% rise in third-quarter sales.

Currys and PC World owner DSG International revealed a 10% drop in quarterly sales, a further indication shoppers were reigning in spending or delaying purchases as prices fell in the run-up to Christmas.