36% of retailers reported a drop in sales, with housewares, furniture and flooring suffering after three months of growth.
The latest CBI Distributive Trades Survey revealed weak sales during the traditional New Year sales period in January, with customers choosing to stay home during the cold snap. The 2.5% rise in Vat is also likely to have deferred consumers from purchasing big-ticket items.

According to the survey, 28% of retailers said that the volume of sales in the year to early January had risen, while 36% said it had dropped. The resulting balance of -8% was weaker than predictions made last month of sales being broadly flat on a year ago.

Sales were described as poor for the time of year by a balance of 22% of retailers, while a net 8% expect sales to remain below seasonal norms in February.

Sectors linked to the housing market suffered a reversal of fortune. This was particularly noticeable for big-ticket items, with sales volumes in durable household goods and furniture and carpets dropping after three consecutive months of growth.

Chairman of the CBI Distributives survey and Asda ceo Andy Clarke said: "2010 has opened on a weak footing, especially compared to the tail end growth of 2009, but the picture should stabilise in February."

He added :"The big freeze kept many shoppers away from the January sales and the Vat hike has hit bigger purchases like furniture and electricals. Also many retailers were much more aggressive in their discounting last January, which could partly explain why sales have slipped a bit this year.

"Overall, the recovery through 2010 is likely to be tentative and weak with a long road to recovery, and consumers are still cautious about spending."

However, Barclays believes there is cautious optimism in the retail sector amidst disappointing results. Commenting on the survey Barclays head of retail and wholesale Richard Lowe said: "Retailers will not be discouraged by January's figures, as the long cold snap will have undoubtedly had an effect on shoppers' ability to get into stores. Businesses will instead already be focusing on achieving good results from major trading moments in the first quarter of 2010, such as Valentine's Day and Easter."