Retailers axed jobs at the fastest rate in 15 years during the 12 months to February.
A survey by the Confederation of British Industry (CBI) showed 33 per cent of retailers were employing fewer people than a year ago, compared with 15 per cent whose staff levels were up.
The balance of minus 18 per cent was the lowest rate since November 1992.
The study also showed retail sales edged up slightly in February.
Some 30 per cent of firms believed their sales volumes were up on a year earlier, compared with 28 per cent who thought they were down.
The balance of two per cent was an improvement on January's figure of minus three per cent.
Economist John Butler, of HSBC, said: "The survey is softer than expected but still consistent with reasonable growth in retail spending."
He said it was unlikely to provide the Bank of England with ammunition to raise interest rates.
Firms were more upbeat, with a balance of plus 14 per cent expecting stronger sales growth in March.
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