The consortium's figures, published in conjunction with KPMG, showed that London performed worse than the rest of the UK in December, having outperformed the rest of the country in November.
However, for the whole of last year the city's sales were stronger than the rest of the UK, with an average monthly gain of 2.1 per cent compared with 1.6 per cent for the whole of the country.
LRC director David Southwell said: 'These figures represent one of the worst Christmas periods ever experienced by London's retailers. The sense of disappointment over this performance was made worse by the level of margin squeezing and all-out promotional activity that many retailers had to indulge in during December. It is becoming clear that consumer confidence in the capital has been worse hit than in the UK as a whole - especially due to factors such as last year's interest rate rises.'