RETAILERS have had their worst Christmas for a decade.

A study by the British Retail Consortium (BRC) and accountants KPMG found like-for-like sales fell by 0.4 per cent last month.

BRC director-general Kevin Hawkins said: "These figures represent the worst Christmas for retailers in the past decade.

"Even the materialisation of the expected last-minute rush and strong trading for many retailers in the post-Christmas sales could not turn December into a positive month.

"However, it was far from the speculative hype of the 'worst Christmas in living memory' proposed by some commentators."

Trading began slowly last month and grew progressively worse, the study found.

But a last-minute bout of present-buying and stronger clearance sales from Boxing Day enabled retailers to recoup some of the lost sales.

Consumers shied away from big items, such as furniture and homewares before Christmas, as they hung on for larger discounts in the end-of-season sales.

Mild weather hit demand for heating and tumble driers, while the BRC said cheaper computers and mobile phones meant sales values were well down on a year ago, despite more units being sold.

Womenswear was the weakest clothing range.

In contrast, sales of food and drink grew as grocers benefited from a longer trading week ahead of Christmas Day and seasonal promotions proved a success.

Richard MacAlister, divisional director at the Newcastle branch of stockbrokers Wise Speke, said: "Footfall was up by five per cent, but people waited for the sales to pick up bargains.

"High interest rates have been having a knock-on effect on consumer confidence and we would expect them to come down later this year.

"I don't think there will be massive amounts of blood shed on the high street, but we could see more takeovers.

"Marks & Spencer is in a particularly poor position."

Mr Hawkins called for the Bank of England to cut interest rates.

He said: "The lack of consumer confidence created by uncertainty over the economy and housing market dominated December and remains a strong concern for the sector.

"With these figures, the MPC (Bank of England monetary policy committee) can no longer dodge the issue of cutting interest rates to help ease consumers' blues."