RETAIL sales volumes fell by more than expected last month.

The decline of 0.4 per cent was at odds with a 0.3 per cent improvement forecast by some analysts and was sharply lower than the 1.1 per cent gain seen the previous month.

The latest figures from the Office for National Statistics (ONS) prey on the nerves of retailers ahead of the key Christmas trading season.

Electricals specialist Dixons this week fuelled those concerns by reporting a slowing in sales growth and forecasting a competitive festive season. French Connection is also finding trading tough after a poor reception to its ranges.

Investec economist David Page said the overall picture for retailers remained healthy, with volumes still 1.2 per cent higher on a quarter-on-quarter basis and up by six per cent on the same month last year.