Stores unveiled a record number of negative trading updates during the the fourth quarter of 2008 – a figure that has only ever been equalled in the first quarter of 2005.

27 per cent of retailers issued negative updates, according to Grant Thornton. The figure equalled the previous worst period, which was suffered in 2005.

However, 31 per cent of statements were positive, which was the highest proportion since the first quarter of 2008.

Food and drink retailers made the most upbeat statements at the end of last year, when 67 per cent issued positive statements compared with just 20 per cent of other retailers.

Grant Thornton head of retail services team David Bush said: “This has been a particularly harrowing three months for the retail trade with some large familiar brand names going into administration and most having to seriously discount their products merely to turn stock into cash.

"Like-for-like sales figures showed a dramatic fall in sales activity. Only 29 per cent of all retailers showed an increase in sales. In the fourth quarter of 2007 the reported figure was 65 per cent."

Five listed retailers also issued profit warnings at the close of 2008.

Bush said: "It is highly likely that the Christmas trading updates which will be released in the next few weeks will be extremely bleak, with even the stronger retailers struggling for sales.”