Retail sales dropped 1.5 per cent from December in January according to official figures.
The results, which fell sharper than analysts expectations, found non-food stores sales jumped 8 per cent while stores selling household goods surged 9.8 per cent compared to January 2013 when heavy snowfall hit businesses across the country.
The huge popularity for online shopping over Christmas showed as online sales slipped 3.3 per cent in January but increased 8.9 per cent year-on-year.
James Brown, retail pricing expert at Simon Kucher & Partners said retailers are typically focussed on short term trading performance vs. budget and like-for-likes, and tend to be far too trigger-happy with promotions when they miss their numbers.
“The reality is, cutting prices makes it that much harder to hit their budget,” he added.
The disappointing results is not good news for Chancellor George Osborne who warned the UK economic recovery is “not yet secure” this morning and could now have less money to prepare for the annual budget on 19 March.