So, was it a Christmas cracker for grocery retailers? Or did the credit crunch leave them nursing a hangover?

No-one has yet posted their full Christmas trading figures, but the picture emerging is one of a merry Christmas for most - although question marks remain over the fortunes of the smaller players.

Though year-on-year sales growth in the overall grocery sector was running at 4.2% in December against 5.2% a year earlier, this was closer to 5.5% for the big players, says Mike Watkins, head of retail and business insight at market analyst Nielsen, and could break through the 6% barrier once all the numbers have been totted up.

If the early indications from Asda, which is not constrained by the same Stock Exchange rules as its fellow big four rivals, are anything to go by, the omens look good. It claims it had its "best-ever Christmas", with 21 million transactions going through its tills in the week before the big day.

In the seven days before Christmas, six Asda stores - Minworth, Havant, Boldon, Derby, Longwell Green and Eastleigh - recorded sales of more than £4m each, while 41 stores surpassed £3m and 159 stores topped £2m.But customers left it later than ever to shop, with Asda's sales on Christmas Eve a third higher than its previous-busiest Christmas Eve, in 2004. Some 126,000 customers were queuing to get into Asda stores as late as midnight.

Analysts believe Morrisons will also put in a strong showing, with year-on-year growth expected to come in at 5.5%. "Morrisons has had very good momentum and we expect this to have continued," says James Collins of Deutsche Bank. "It has invested heavily in promotions and advertising."

Growth of 4% to 4.5% is forecast for Tesco and Sainsbury's, although City analysts warn Sainsbury's may suffer from tough comparatives after achieving 5.8% sales growth 12 months ago.

"Sainsbury's is the biggest risk because of tough comparatives with last year," says one analyst. "Tesco, on the other hand, did relatively poorly last year."

Marks & Spencer, meanwhile, is expected to register overall growth of about 4.5%, although analysts expect growth to be just 1% to 2.5% for food. "This year M&S has been lagging behind in like-for-like food sales. We expect Christmas to be the same," says John Stevenson of Shore Capital.

Tesco and Asda are likely to have done particularly well in non-food, says Watkins. "Consumers have been more cautious this year and the high street has had a difficult time. But it seems the value proposition of Tesco and Asda is working," he says.

Tesco claims it had bumper non-food sales online through Tesco Direct, with items such as cameras, iPods, laptops, satnavs and hair-straighteners selling out. And Asda says its £50 electric guitar proved a huge hit. This would appear to support Watkins' theory the big four thrived at the expense of the smaller chains. "The big four will have done well, but it's a double-sided coin," he says. "That will have taken more business away from independents, specialists and smaller multiple retailers."

Not so, claim some of those chains. "We've enjoyed sensational sales this Christmas," says Colin Smith, trading and marketing director at Somerfield. "We outperformed the industry for the 10 weeks right up to New Year's Eve and are delighted that the business has come out of Christmas in great shape."

Guy McCracken, chief executive, food retail at The Co-operative Group, is equally bullish. "Early indications are that the enlarged group's food business enjoyed a successful Christmas, with a particularly strong Christmas Eve performance, when sales reached almost £24m - a record figure."

It's a similar message from Costcutter, which says some stores enjoyed their best-ever sales. "The Christmas period was positive for the business and our retail partners," says MD Nick Ivel. "This is due to our focus on availability of essential lines, our strong BWS offer and the introduction of a new aggressive '10 Day Price Buster' promotion."

Meanwhile, Nisa-Today's announced record sales with growth of 5.1% through its Central Distribution Services. Waitrose MD Mark Price says like-for-like sales rose 5.7% in the week to Christmas and just over 7% in total.

Not everyone is so upbeat, however. Sanjeev Nanda, who owns four Spar stores in Glasgow, says he had a "pretty quiet" Christmas and that small retailers were hit by the success of big chains.

Whether or not that's the case, it would be wrong to take strong sales as evidence Christmas was an unqualified success for the big players, says Watkins.

Sales may have come at the expense of profit margins once the cost of promotions and advertising are taken is into account, he warns: "The question is: how much did it cost to keep the momentum going?"nOnline festive sales rocket

Online retailers enjoyed a bumper Christmas, with sales of food over the net rocketing as more consumers opted to avoid the crowds and shop from home.

Ocado says it took £10m during the week before Christmas compared with £800,000 in its first year, 2002. The average basket value reached a record level on Sunday 23 December, topping £200 per customer.

"Demand this year really was unprecedented," says Jason Gissing, Ocado's chief financial officer. "It's been an amazing year for us all round. Our sales equate to 64% compounded annual growth - an astonishing number for a retail business."

Sales did not just come from established Ocado users: 8,000 new customers registered in the week before Christmas. also had a record-breaking festive period, taking two million customer orders in the four weeks up to Christmas - almost twice as many as last year.

Asda says trade on the web mirrored the brisk business seen in its stores.

Mike Watkins, head of retail and business insight at Nielsen, says: "Online grocery sales growth was running at 25% year-on-year in November and we expect that number to be even greater for December."Festive trading period updates

January 9 - Marks & Spencer - 13 weeks to 29 December

January 10 - Sainsbury's - 12 weeks to 29 December

January 15 - Tesco - 6 weeks to 5 January

January 22 - Morrisons - 6 weeks to 6 January

TBC - Waitrose