John Lewis reported that turnover in the week to last Saturday were 3.6% down on the same period last year.

Retailers are pinning their hopes on last-minute spending sprees

The company said it was relying on a last minute spending spree to rescue its fortunes.

Director of trading, Brian O'Callaghan said: "Our stores were certainly busy but we lacked the level of gift spending required.

"All now rests on the final week and whether the final days of Christmas pack sufficient punch."

While furnishings, silverware, lighting, books, stationery and Christmas goods were selling well, the company admitted margins and sales were suffering.

Last-minute dash

Retailers took some comfort from reports earlier this week that people were making a last minute dash to the shops in the run-up to Christmas.

NatWest Bank reported that record spending on its debit and credit cards reached £441,000 a minute last Saturday - a total of £215m for the day.

Cash withdrawals also hit a record, with £96m taken out in a flurry of last minute shopping.

John Lewis is owned by its staff and has 23 stores around the country.