Shoppers shunned the high street for the Boxing Day sales as people opted to stay at home and buy online.
Compared to last year footfall was down by 4.5 per cent. It is thought Black Friday discounts last month may have also played a role in the downturn.
As a result high streets and shopping centres saw a decline in the number of shoppers.
The significant decline was much “greater than expected", said Diane Wehrle, insights director at Springboard, which monitors retail performance.
“What we have seen in the last couple of years is a structural shift in the Christmas trading period,” she the BBC. “The hotspots for Christmas trading around Boxing Day and New Year’s Day are dissipating."
Independent retail analyst Richard Hyman, told The Guardian consumer confidence was low.
“There’s massive uncertainty," he said. "You’ve got inflation coming through, you’ve got earnings lagging to where they were years ago. This makes life difficult. Why would people be optimistic?”
However, the New West End Company predicted that more than £50m would be spent in upmarket shops on London's Oxford Street, Regent Street and Bond Street on Boxing Day, at rise of 4 per cent from 2016.
However, police were called to Oxford street after shoppers mistakenly thought they heard gunfire. One woman was injured when a window smashed.
Scotland Yard said they were called to the bustling high street on one of its busiest days of the year to reports of shots.
Armed police were scrambled to the area alongside regular officers but no trace of the apparent gunshots, nor signs of any criminal offence, were found.
The chaos appears to have centred on the House of Fraser department store, where one large window pane facing on to the pavement was broken.
A woman suffered non-life threatening injuries in a fall linked to the smash, which it is understood she did not cause.
Passerby Julia Dixon wrote on Twitter: “Craziness in House of Fraser, Oxford Street, never been in a stampede before!”
It is the second time in recent weeks that armed police rushed to Oxford Street following a gunshot scare.
Agencies contributed to this report
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