US retailers lined up today to confess to terrible December figures and cut their profits forecasts following America's worst festive shopping season in almost 40 years.

The International Council of Shopping Centres said that December's sales were down 1.7 per cent from the same time last year across the board, with sales in November and December down 2.2 per cent. It was the worst decline in what is usually a bumper shopping period since 1970.

Wal-Mart, the world's biggest retailer, led the parade of bad news yesterday, revealing that sales at its US stores that had been open at least a year rose 1.7 per cent last month, down on analysts' forecast of a 2.8 per cent rise.

The low-cost chain has lagged other retailers in recent years, but has had a resurgence as the shop of choice in the recession with its array of discount goods.

But the company said yesterday that although groceries and health-related products made mid-single digit percentage sales gains in December, sales of clothing and jewelry were soft.

As a result, Wal-Mart predicted that it would make profits of 91 cents to 94 cents per share from continuing operations for the fourth quarter that began on November 1, down from its November forecast of $1.03 to $1.07.

Eduardo Castro-Wright, vice-chairman of Wal-Mart, blamed the tough economy and severe winter weather for a challenging holiday period.

Macy's, the second-largest US department store company, went a step further by slashing its annual profit forecast and announcing the closure of 11 stores. Macy's said that profit for the year would be about $1.10 per share, down from a previous minimum forecast of $1.30.

Despite abundant advertising and huge sales, the Cincinnati-based company admitted that sales for the fourth quarter would be down by as much as 7.5 per cent.

Other retailers warned their investors today that earnings would be hit by December's poor sales.

J Crew Group, the clothing chain, said that it expected a loss of 24 cents to 29 cents a share for the fourth quarter instead of the profit of 5 cents to 10 cents it previously forecast.

Limited Brands, the owner of Victoria's Secret lingerie stores, said that December same-store sales fell by a worse-than-expected 10 percent. The company predicted a fourth-quarter profit of 55 cents to 70 cents a share, below the average analyst estimate of 88 cents.

Zale, the jewellery retailer, said that same-store sales fell 22 percent in December and 19.5 percent for the entire November-December holiday period. Neal Goldberg, Zale's chief executive, described the holiday sales period as "the most difficult in memory".

Walgreen, America's second-largest drugstore chain, said today that it would cut about 9 per cent of its staff. About 1,000 management jobs will go as part of a $1 billion annual cost-savings plan. Walgreen's been punished as consumers slashed non-essential purchases.

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