In the fourth quarter of last year retailers issued the highest number of negative trading statements on the London Stock Exchange in nearly two years.

According to business and financial advisory Grant Thornton, 22 per cent of quoted retailers posted negative trading statements in the final quarter of 2007, compared with 15 per cent in the third quarter of 2007. The number of positive trading statements dropped to 41 per cent from 62 per cent in Q3.

David Bush, head of Grant Thornton's retail services team, said: “It remains to be seen whether the subsequent well-publicised, post-Christmas Sales frenzy will have been enough to fully offset the slow start to Christmas trading and a sluggish quarter overall.”

Non-food and non-drink retailers suffered the most during the fourth quarter, with the proportion of retailers in this category that posted positive trading statements halving to 29 per cent. “It would appear that many shoppers over Christmas cut back on spending on presents before they did on food and drink,” said Bush.

The number of retailers that issued profit warnings in the fourth quarter increased to five – the highest fourth quarter figure since 2004.