Household goods suffer particularly badly, while grocers see their worst sales growth in two years, as consumers are squeezed by rising inflation.
The CBI's latest Distributive Trades Survey revealed that 33% of retailers saw sales volumes increase on a year ago, compared with 34% who reported a fall from May 27 to June 15. The resulting balance of -2% is the first time in a year that sales have shown no growth.

Sales were below average for the time of year, with 36% of retailers reporting poor sales for the month and just 17% describing them as good.

Grocers' sales grew at the slowest pace in more than two years, while sales of durable household goods fell particularly rapidly, down 85%. Retailers across the board expect sales to remain flat next month.

Orders placed to suppliers by retailers have also edged down 5% and are expected to be flat in July. Among wholesalers, 14% reported a rise in sales volumes in June, while 34% saw a fall, giving a balance of -20%, the lowest since January 2010.

Asda cfo and CBI Distributive Trades Panel chair Judith McKenna said: "After a year of growth, high street sales volumes fizzled out in June. Consumers are really feeling the pinch as disposable incomes continue to be squeezed by rising prices and weak earnings growth."

She added: "Shoppers are budgeting hard and cutting back on their discretionary spending, such as on clothes and big-ticket household goods. Household budgets are likely to remain tight over the coming months, with inflation edging higher as increases in domestic gas and electricity prices take effect."