Sales on the high street are stabilising, the CBI said today, but retailers still expect conditions to remain subdued.
The same number of retailers reported a fall and rise in sales in the first two weeks of March, according to the CBI's latest survey, following an overall decline in February.
The survey comes after official figures revealed a gloomier-than-expected picture of the retail sector, with retail sales falling in February and growing by less than previously thought in January.
Judith McKenna, chair of the CBI distributive trades panel and chief operating officer at supermarket Asda, said: "The general retail outlook remains tough and firms expect volumes of sales and orders to fall next month.
"The squeeze on people's pockets continues to bite, despite a recent fall in inflation, with wage growth modest and fuel costs remaining high."
The CBI said the majority of retailers said sales were low for the time of year and that over the next month they expect both volume of sales and the volume of orders on suppliers to remain subdued.
Relative to demand, stock levels rose sharply last month, but are expected to be run down slightly next month, the CBI said.
Furniture and carpets saw an improvement for the second consecutive month, while the majority of grocers saw an increase in sales continuing the trend of healthier figures since December last year.
Motor traders saw their first increase in sales since December 2010, the CBI said, and expectations were that this will continue in the next month.
Chris Williamson, chief economist at financial services information provider Markit, said the survey "revealed a picture of stagnation rather than growth".
He added: "The data suggest that shoppers remain very reluctant to spend in general, worrying about job security, rising unemployment, high petrol prices and low wage growth."