Traders must try to remain positive, business leader Graham Jones, a spokesman for the Oxford High Street Association, says.

He spoke out after the British Chambers of Commerce and British Retail Consortium revealed poor trading figures for December, traditionally used as an indicator for the year to come. They revealed a fall of 3.3 per cent, compared to 2007, the heaviest fall since the survey began 14 years ago.

Mr Jones said: “Traders in Oxford I have spoken to in the past couple of weeks have indicated that they have been through a patchy period of trading. One or two did better than last year, but there are others who have not fared well and we are entering what is usually a very quiet period in terms of trade.

“But my advice to traders is that although they face a tough couple of months, they need to do everything they can to keep their costs down and weather the storm until the summer.”

Barry Wheatley, spokesman for the Oxfordshire Federation of Small Businesses, said: “The Christmas period is crucial for the retail sector.

“For some businesses it can provide 25 per cent of their annual takings.

“The feedback I have been getting is that traders in Oxford city have done better than the market towns around the county.

“In Oxford, the free buses for late night shopping worked well, but the market towns found it harder to attract customers.”

Keith Slater, spokesman for the Oxfordshire Chamber of Commerce, said: “So far, we have not seen a major decline in the retail sector in the county, which is encouraging.”

Food and drink was one of the few sectors to see an increase in sales during the period.