Retail sales figures fell 3.3% on a like-for-like basis in December but shoppers still opted for their traditional Christmas meals, according to the British Retail Consortium (BRC) and KPMG.
The BRC said the yearly drop on its sales monitor from last December represents the worst set of figures for any month since it began the survey 14 years ago.
And even though consumers decided to splash out on Christmas foods, the BRC said, food sales slowed again at their weakest since March, with people targeting discounts and value ranges.
Director general Stephen Robertson said: “These are truly dreadful numbers. Some retailers were more successful than others and the second half of December was better than the first.
“But overall the food sector was almost the only one to show growth. Many hard-pressed customers couldn’t be seduced into spending.”
Yesterday, the BRC criticised the government for going ahead with its plans to introduce business rate supplements, despite the gloomy economic environment.
IGD chief executive Joanne Denney-Finch added: “December’s grocery sales remained robust, but grew more slowly than the previous month.
“This may be down to retailers promoting heavily during the last week of November to encourage people to make some Christmas purchases early. Food inflation also started to ease during the final part of 2008.”
The BRC also said some customers went back to basics and cooked from scratch instead of buying ready meals.
Meat, soups, vegetables and puddings were also helped by the very cold weather during the month, it added.
Tesco today reported its worst sales growth for the Christmas trading period since 1993.
Last month, the BRC predicted the Christmas retail picture would not be pretty.