Retailers are bearing the brunt of the economic downturn, posting the highest level of negative trading statements in three years during the second quarter of 2008, according to a Grant Thornton study.

The study found that a quarter of retailers issued negative trading updates during the second quarter of 2008. This is the highest proportion since the first quarter of 2005, when 27 per cent of retailers posted negative updates.

The number of positive updates decreased as well, falling from 37 per cent in the first quarter of 2008 to 27 per cent in the last quarter, while just 62 per cent reported an increase in like-for-like sales – the lowest figure since the first quarter of 2006.

Grant Thornton’s Retail Services team head David Bush said: “High street retailers are starting to feel the full impact of the credit crunch. There appears little likelihood of a significant turnaround in the short term.”