High street retailers were forced into aggressive early discounts to lure in savvy shoppers as sales flagged before Christmas, according to figures.
Consumer spending growth nearly ground to a halt in the weeks before Christmas amid a marked trend for shoppers to target discount days for the best deals.
Sales growth plunged after the Black Friday and Cyber Monday sales events at the end of November and beginning of December, data from Barclaycard shows.
It reveals that after a 10.4% leap that weekend, spending rose by a paltry 0.9% between December 3 and 17, only marginally edging higher, to 1.2% growth in the final six days before Christmas Eve - a drop when inflation is taken into account.
A raft of retailers, including major players such as Marks & Spencer and Debenhams, resorted to slashing prices in an attempt to boost trade, with the value of transactions falling by 3.5% last month, the data showed.
But spending bounced back on Christmas Day and Boxing Day as the clearance sales began in earnest, rising by 13.6%, followed by a 4.8% hike on December 27.
Spending overall rose by 2.9% year-on-year in December, but this was lower than the 3% rise seen in November as a last-minute sales surge failed to materialise.
A spokesman for Barclaycard said: "Whilst consumers spent more this Christmas than last, demonstrating that their confidence is up, they were determined to get the best deal - waiting for the big discount days and using the web to compare prices."
Supermarket Asda described the festive season as "very tough" for retailers.
Andy Clarke, president and chief executive of Asda, said: "This was a very tough December for retailers with price-conscious customers leaving it later than ever before to buy presents and do their big Christmas food shop."
Asda said many shoppers held off until the last two days before Christmas, with the chain notching up a record 4.8 million customers on December 23, although it will not provide figures for the period until February 20.
Festive trading updates this week from its "big four" rivals Tesco and Sainsbury's will be closely watched amid fears the major players lost out to discount chains Aldi and Lidl, while sales figures from Marks & Spencer are also likely to reveal another tough Christmas for the high street bellwether.
Wider retail figures from the British Retail Consortium on Friday will shed further light on how the sector performed.
Barclaycard's data showed that spending fell by 0.9% in supermarkets in December and was also down by 3.8% in electronic stores.
But restaurants fared well with a 12.8% rise, as did DIY stores as spending lifted 9.3%, followed by family clothing which was up by 9%.