New data shows from the British Retail Consortium (BRC) shows the high street suffered disappointing November trading.
Research published today shows like-for-like sales grew 1.8 per cent last month compared to a dire November 2008, when they were down 2.6 per cent as the financial crisis decimated consumer confidence.
But the figure marks a retreat from the 3.8 per cent gain seen in October - the best for the month since 2002 - amid a further decline in food inflation.
With only 16 shopping days left to Christmas, BRC director general Stephen Robertson said consumer confidence is “fragile and has taken a turn for the worse”.
“We’re the only major economy still in recession. Uncertainty over jobs and future tax increases and Government spending cuts is making customers more cautious,” he said.
“Retailers are hopeful of a better Christmas than last year’s dire performance, but it’s still all to play for.”
November sales were expected to have been stronger because of the comparison to the second worst month in 2008.
But Mr Robertson said the figure was not as bad as it first appeared, as a sharp decline in food inflation is behind much of the drag on sales.
The unseasonably mild weather had a significant effect on shoppers’ buying habits.
Clothing fell back below their already weak levels last year despite discounting and some special sales days.
Womenswear was slightly down on the previous November and menswear suffered its worst year-on-year fall since May 2008 as warmer weather hit demand for winter coats and knitwear.
Meanwhile, very wet weather helped an uplift in demand for boots.
Overall, non-food sales did see an improvement as the festive shopping season got under way.
Sales of furniture and floor coverings maintained October’s trajectory against sharp falls last year.
The BRC said fitted kitchens, upholstery and beds sold well, especially where there were pre-Christmas delivery offers.
Discounting failed to boost book sales, which were below those of a year earlier despite an improvement in hardback non-fiction.
Toys were popular, particularly traditional lines, while the release of Call of Duty: Modern Warfare 2 helped boost gaming and in music Susan Boyle’s debut album broke the record for first week sales.
Helen Dickinson, head of retail at KPMG, said the numbers were “disappointing” at first glance, but once the impact of slowing food inflation was removed the numbers actually represent a “solid” start to Christmas trading.
“Although regaining ground lost in the early run up to Christmas is difficult, if not impossible, many retailers will be quietly confident that their performance will not be anywhere near as bad as some may have expected six months ago,” she said.
Official retail sales volumes have picked up recently, with October’s sales shown to be 0.4 per cent ahead of an upwardly-revised September figure and 3.4 per cent ahead of the same month last year - the biggest year-on-year rise since May 2008 at the beginning of the recession.