Britain's biggest electrical retailer DSG International sank deeper into the mire as shoppers cut back spending on big-ticket items and wait to buy computers and TVs.

The size of the task facing chief executive John Browett was underlined today when the electricals retailer revealed that its Christmas trading was awful.

Sales at the Currys-to-PC World group slumped 10% in the 12 weeks to 10 January, increasing the doubt felt in the City that the company can survive.

Browett arrived from Tesco last year, just as the consumer downturn began, to take on a company already facing serious structural problems.

The shares have crashed from 190p two years ago, when DSG was in the FTSE 100, to 18p today after further fall of 8%. There is little sign of a respite for investors. Sales will keep falling in what will be a “challenging” 2009, the company warned.

Browett said: “The sales pattern through the period was as we anticipated with customers waiting for the post-Christmas sales to purchase discretionary products, particularly televisions and laptops.”

Although Browett has always impressed the City and remains highly rated as a manager, there is growing concern for DSG's future. Analysts were expecting sales to fall by a slightly less disappointing 7%.

Browett says there is no sign of green shoots for the economy. “We expect 2009 to be challenging across most of our markets and are actively planning and managing the business,” he said.

DSG is planning further cost reductions in the current year of £20 million because of the trading environment, bringing its total savings for the year to £95 million.

Rival Home Retail Group saw a similar slump in sales. The Argos catalogue business was down 7.5% in the 18 weeks to 3 January, while DIY store Homebase fell 10.2%.

The shares took a kicking as the numbers emerged, down 163/4p at 1891/4p.

But Home Retail can claim to be weathering the storm better than most. It moved last year to slash costs and lower City expectations, meaning it should still meet profit forecasts for the year of £320 million.

Chief executive Terry Duddy has been pruning staff levels, but claimed no drastic action would be necessary.

“We have had an ongoing programme and there will be pressure on jobs, there is no doubt about that. But there won't be massive numbers of people in a sudden swipe,” he said.

Like other retailers, Home Retail enjoyed a late Christmas rush, but the closing down sales at Woolworths forced it to slash prices, further hitting its margins. Argos had sales of £1.8 billion driven by video gaming in particular.

Homebase sold £479 million of goods, with energy efficiency products in vogue.

One retailer bucking the trend is Mothercare. It saw total sales up 4.2% in the 13 weeks to January 9, despite cutting back its number of stores. UK like-for-like sales rose 1.1%.

Mothercare chief executive Ben Gordon said the market is “difficult” but reckons the company will still hit forecasts.