Aug. 29--Grim trading figures from the High Street have stoked fears the economy is heading for a recession that will surpass the slump seen in the early 1990s.

And while this is far from good news for any business, it is Britain's consumer-facing companies that will be hit the hardest.

Household names such as Marks & Spencer, Guinness owner Diageo and JD Wetherspoon rely on British punters coming through their doors or snapping up their products. When purse-strings are tightened, they are the first to feel the pain.

In the past 12 months alone, more than £55bn has been wiped off the value of FTSE350 firms operating in consumer-facing sectors from shops and pubs to car manufacturers and brewers (see table).

The latest survey by the Confederation of British Industry has added to the gloom.

It revealed High Street sales crashed to their lowest level in a quarter of a century in August as the damp weather and soaring bills convinced shoppers to save cash rather than splashing out.

Of the 153 firms questioned by the CBI, 60pc said sales had fallen, compared with 13pc who said they had risen.

The balance of -46pc was even worse than already downbeat City expectations.

Pessimism is widespread among shop owners, with a balance of 38pc of retailers expecting the backdrop to get even worse over the next three months.

More jobs are likely to be shed, as 31pc more retailers reporting a fall rather than a rise in hiring.

Lehman Bros economist Peter Newland said: "The retail sector looks likely to contract in the third quarter and we continue to expect the broader economy to suffer recession in the second half of the year."

Andy Clarke, chairman of the CBI's survey panel and retail director of Asda, said: "This has been a summer that many retailers would rather forget."

One fashion retail chief executive said trading was the worst it had been for at "least 10 years."

However, he said it was difficult to compare the situation today with the last time the economy hit a wall in the early nineties.

He said: "It was different then because we hadn't been through such a huge consumer boom.

"Retailers have been opening lots of new shops in recent years in a bid to achieve bigger and bigger volumes and now they are faced with a dwindling customer base. That has hit retailers hard."

This, combined with the rising dollar, will create a "double whammy" of woe for shop-owners, he added.

Many retail chains buy cheap goods from Asian countries, such as China, using dollars.

As the greenback strengthens against the pound, profits will come under pressure.