The John Lewis department store chain said trade was down a disturbing 7.6% in the seven days to October 18 – the week when the government was forced into an emergency bail-out of three of the UK’s biggest banks.

It is the fifth consecutive week of sales declines for the department store.

The retailer said sales were hit by the different timing of school half term breaks in different parts of the country, but there was also a dip on the Saturday compared with the same Saturday last year when England played South Africa in the rugby world cup final in Paris and high streets were quiet.

Only one store, in Aberdeen, recorded sales higher than last year and 17 were down by more than 10%. The worst performing outlet was Peterborough, down 25% on a year ago.

Growth has also slowed rapidly at the department store’s online business. JohnLewis.com was recording annual gains of more than 20% until recently, but is now up just 5.7% on last year.

Earlier this week, a survey showed that internet spending in September was up 15%, compared with the 73% growth recorded 12 months earlier.

The worst performing John Lewis departments were those selling homewares, which were down 13.5% on a year ago. Electricals and home technology were down nearly 10%, although fashion sales were ahead 0.9%.

The company said it believed other retailers were performing even worse. “We know that if it’s tough for John Lewis, the chances are it’s even tougher for everyone else. Our task remains to outperform the wider market and all indications are that we continue to do so,” the store said.

Earlier this week, Home Retail Group said recent sales at its Argos offshoot were down about 9% – the worst decline in the chain’s 35-year history.

Debenhams said sales had fallen 4% in recent weeks while PC World is down 11% in the past six months and Currys is down 7%.

A raft of retailers have announced cuts in investment spending to conserve cash.

House of Fraser and Debenhams have been cutting prices to pull in shoppers, which is bound to hit profit margins. Over the past two weeks, HoF has been running a mid-season sale, while Debenhams has just had another day of “blue cross” discounts.

John Lewis’s Waitrose supermarkets are also under pressure as shoppers trade down to cheaper grocers and brands. Sales at the upmarket chain last week were ahead just 0.5% on last year’s levels – including the impact of inflation.

Economist Howard Archer of Global Insight said the financial crisis and fears about the economy had given already-nervous consumers another jolt: “Given that John Lewis’ department store sales are seen as a good bellwether for the health of consumer spending, the 7.6% year-on-year plunge in sales intensifies fears that retailers are in for an extremely difficult Christmas and beyond.

“There is no getting away from the fact that this is a very disappointing and worrying performance that bodes ill for the retail sector in general.”

Freddie George, retail analyst at Seymour Pierce, said: “Our major concern is that retailers, particularly the apparel retailers, are facing both weak sales in the lead up to Christmas and greater promotional activity, which will impact margins.”

News reported by The Guardian