Retail sales dropped at their sharpest rate in four years in January, despite heavy discounting in many stores.
Sales fell 1.8% during the month, although they were up 3.3% on the year, the Office for National Statistics (ONS) reported.
Among the worst-hit areas on the High Street were household goods shops and clothing stores.
The weaker January sales came despite prices in stores being on average 0.4% lower than a year ago, the ONS said.
Consumer confidence fell in December to its lowest level since the start of the Iraq war more than two years ago, a survey showed on Thursday.
Consultancy GfK NOP said its barometer of consumer sentiment fell to -9 in December after a reading of -8 in November. That was the lowest point since March 2003 and confounded analysts’ predictions of a rise to -6.
“At the headline level at least, this release does not paint a very bright picture of conditions in the consumer sector,” said George Johns, economist at Barclays Capital.
CHRISTMAS EVE failed to deliver a last-minute reprieve for retailers this year. Although it fell on a Saturday, the number of shoppers on the high street was reported to be 18 per cent down compared with Christmas Eve last year.
The much-anticipated final dash to the high street did not materialise, according to figures from FootFall, which found that shoppers instead had opted to shop for last-minute gifts on Friday.
The market-tracking agency said that Friday had turned out to be “boom day�?, in contrast with the performance on Saturday, when the number of shoppers was down 15.4 per cent on the previous week.
A trillion pounds of consumer debt and soaring household bills have shrunk spending power, forcing retailers to go on the price offensive in a quarter when many make the bulk of their annual profits.