The high street has suffered the fastest monthly fall in sales since the height of the recession in 2009.
The dramatic drop in high street sales has set alarm bells ringing among retailers as they approach the crucial Christmas trading period.
A survey by the CBI found that 50 per cent of retailers suffered declining sales in October while only 15 per cent benefited from an increase, leaving a rounded balance of -36 per cent, the lowest since March 2009.
The business lobby group said the survey showed retailers were ‘feeling the pinch’ from rising inflation, which has eaten into consumer incomes and squeezed profit margins.
Uncertainty surrounding the outcome of the UK Brexit negotiations has also been blamed for the drop.
Rain-Newton Smith, the CBI chief economist, said: “While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand.”
The CBI survey came as Debenhams warned of an uncertain environment on the high street in the run up to Christmas after suffering a 44 per cent dive in profits.
The department store confirmed the closure of two stores, in Eltham, south London and at Farnborough, Hampshire, affecting about 80 jobs, as high street sales continue to fall.
They are the first of up to ten UK branches that Debenhams has earmarked for closure.
Sergio Bucher, Debenhams’ chief executive, said: “The environment remains uncertain and we face tough comparatives over the key Christmas weeks. However, we are well prepared for peak trading and the early signs from our activity to date confirm that we are moving in the right direction.”