We have shopped. And now we have dropped. Food sales tumbled 3.6 per cent last month and that was before Gordon Brown told us to economise by making soup from potato peelings. The 3.9 per cent slump in overall sales volumes was the worst since 1986.

The lurch down in June, after good figures in May, shows the danger of focusing too much on the results for one month. But the underlying trend is clear and it is in line with the very gloomy anecdotal evidence from many of Britain's leading retailers.

The short-term outlook for the nation's shopkeepers is grim - one respected forecaster predicted yesterday that consumer spending would fall 1 per cent next year, bringing to an end a 17-year golden age of rising sales. The big worry for retailers is that the medium-term prospects may be not much better.

Verdict Consulting, the retail researcher, believes that spending growth will slow to 2.6 per cent a year in the 2010s, down from 6 per cent in the 1990s. At the same time retailers' costs will soar, thanks to high oil prices, increasing environmental regulation and rising wages in China.

This year retail cost inflation is estimated at about 4 per cent. That could jump to 9 per cent or more over the next ten years, according to Verdict.

It is tempting for retailers to think that the solution lies in fast-growing markets overseas. But there are problems there, too. Kingfisher, the B&Q DIY giant, admitted yesterday that its sales in China had fallen by more than a quarter.

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