Shoppers' confidence was battered last week by the collapse of Woolworths and MFI, according to John Lewis, which reported a 13 per cent drop in sales in the week to Saturday against the same period last year.

"Confidence was relatively low already, and there's no doubt Woolies hit it again," said Patrick Lewis, head of retail operations at the department store chain. Trading was particularly grim on Wednesday, he said, when the two retailers filed for administration.