A stark reminder of the challenges facing retailers is how the head of retail at accountancy firm KPMG described the "rather sobering" sales figures for January.

These show that the value of like-for-like UK retail sales were down 0.3 per cent to produce the second-worst January after January 2010 since 1995, when the British Retail Consortium (BRC)-KPMG retail sales monitor began.

"Despite consumer confidence improving in January, actual spending shows households concentrating on paying off debt, saving and battening down for another tough year," said BRC director-general Stephen Robertson.

"Big-ticket goods are still the weakest part of retailing, undermined further by the comparison with last year when beating the VAT rise and promotions linked to it helped sales."

He pointed out that last year like-for-like growth averaged virtually zero "and that was with a boost to top-line figures from inflation, including the higher VAT rate, which won't continue in 2012".

KPMG's retail head Helen Dickinson added: "The underlying health of the sector remains a key concern, with margins and profits squeezed by the relentless need to discount to generate demand.

"Many retailers are rethinking their entire business models in a desperate attempt to adapt to this low-growth environment and pricing remains more strategic than ever before."