Deloitte said that higher unemployment, taxes and National Insurance contributions will take their toll on retail sales next year.

Its report out today, entitled The Retail Review, says the grocers are winning the battle for consumer spend, and that to retaliate non-food retailers need to focus more than ever on differentiation.

78% of people are spending the same on food and groceries, but 45% are spending less on clothing, the report claimed.

The report also says that more than half of those surveyed say their shopping habits have changed for the long term.

Shoppers have cut back on indulgences and impulse purchases, and 65% of those surveyed said they are more aware of what they spend their money on.

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