Nearly two thirds of retailers experienced a fall in sales volumes in the first half of January, and February is expected to be just as tough.
According to the CBI Distributive Trades Survey, 63 per cent of retailers said year-on-year sales volumes were down in the period, while 16 per cent reported that volumes rose.
The resulting balance of -47 per cent was broadly in line with the CBI's expectations, and an improvement of December's figures, when the survey recored a record low balance of -55.
A balance of 52 per cent of store chiefs expects sales to decline in February, which is the weakest forecast since the survey began in 1983.
However, if these expectations are met, sales would still not fall as sharply as they did in December.
The three-month moving average weakened to a survey low balance of -49 per cent.
Footwear and leather was the only sector that experienced sales growth compared to a year ago. Homewares and clothing retailers were hit particularly hard.
Chairman of the CBI Distributive Trades Panel and Asda retail director Andy Clarke said: "The Christmas and new year trading period revealed mixed fortunes with clear divisions between value and premium retailers. Retailers caught in the middle will continue to suffer as customers vote with their feet. "As petrol costs and food inflation have come down and household energy bills are beginning to ease, consumers will have a bit more spending power, but as job losses increase retailers will face a difficult year."
CBI Chief Economic Adviser Ian McCafferty said: "Most of the retail sector continues to struggle as the recession bites more deeply, and February will be tough. "Later this year we hope to see some benefit from recent interest rate cuts, falling inflation, and the Government's steps to kickstart lending. But retailers will still have to work hard to coax anxious consumers back into the shops."
