63 per cent of retailers surveyed for the CBI’s Distributive Trades Survey said that year-on-year sales volumes fell in the first half of March.
The figures confirm experts’ fears that a recent uplift in sales on the high street is not going to be sustained in the coming months.
Capital Economics analyst Vicky Redwood said: “We still think that consumer spending has further to fall as rising unemployment, slowing pay growth and falling house prices more than offset the boost to spending power from falling inflation.”
These fears have been echoed by retailers surveyed for the report, 42 per cent of which are predicting poor sales performance in April.
CBI Distributive Trades Panel chairman and Asda chief operating officer Andy Clarke said: "These poor sales figures for March complete a full year of pain for many retailers, and it is disappointing that the less bleak results in February could not be sustained.
“With unemployment rising and household incomes struggling, the high street faces some testing times ahead. The recession continues to force consumers to re-examine every item of spending. Only those retailers who have matched their offering to those new patterns of behaviour are faring well."
The amount of orders placed by retailers with their suppliers also fell in the first half of March according to the CBI, with 47 per cent reporting a fall in the volume of orders placed. This represents a 31 per cent fall in the volume of orders from February.
Grocers were the only members of the retail sector to report positive sales growth in the first half of March, although this was at a slower rate than was reported in February.