More than half of retailers reported lower sales in the year to early February and retail job cuts rose to a record rate in the same period, according to the CBI's latest Distributive Trades Survey.
In the survey, conducted between January 27 and February 11, 52 per cent of responding retailers said their sales were down, while 27 per cent reported sales were up.
The balance of –25 per cent was less than the –47 per cent recorded in January but is expected to worsen slightly to –33 per cent in March.
The declines were not as heavy as the –52 feared by retailers during the January survey, and some sectors — supermarkets and footwear shops — experienced sales growth in the period.
A balance of 60 per cent of grocers reported increased year-on-year sales volumes. Footwear and leather retail sales also grew, with a positive balance of 39 per cent saying sales were up.
Retail employment conditions worsened sharply. 60 per cent of retailers said they had cut jobs, with 10 per cent saying they had increased headcount.
The balance of –49 per cent was the lowest since the quarterly survey began in August 1983. Retailers expect another record low balance in employment in March.
Other findings of the survey included:
Sales were reported to be poor by a net 39 per cent of retailers
The three-month moving average of sales volumes showed a balance of –42 per cent.
The volume of orders to suppliers fell in the year to February with a balance of –31 per cent.
Stock levels were deemed adequate to meet demand by a net 19 per cent of surveyed firms
Average selling prices in the year to February were up for a balance of 38 per cent of retailers.
The chairman of the CBI Distributive Trades Panel, Asda chief operating officer Andy Clarke, said: "February was another tough month and sadly many retailers are cutting jobs as shoppers stay away and the recession deepens. But conditions were not quite as harsh as they were last month and in the run up to Christmas. "Supermarkets and footwear and leather shops enjoyed some pretty strong growth, proving that, as the flight to the value end of the market continues, those with the right offering can fare well during these tough times. "March looks similarly testing but we hope that, as the year goes on, lower interest rates and falling inflation will encourage a pick-up in spending."