The onslaught of the credit crunch has finally hit shoppers’ wallets with retail sales falling at record levels during June.

Official figures show that total sales on the high street fell by 3.9% between May and June, the largest decrease since records began in 1986. The fall follows a surge in retail activity in May, with a 3.6% increase in total sales.

Food shopping took a significant hit, with sales down by 3.6% in June, as households react to higher food prices and cut back on supermarket splurges. However, non-food stores took the biggest hit, falling 4.5% during the month.

The Conservative Party's shadow chief secretary to the Treasury, Philip Hammond, says the figures show the "good times are over".

He adds: "Faced with soaring prices, stagnant earnings and rising housing costs, families are being forced to tighten their belts. Businesses, families and now the high street are looking to the government for help – but all Gordon Brown’s got to offer is yet more tax hikes to come.”

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