”The main reason for the slump is that Swedes are holding on to their pennies, but the mild weather hasn’t improved the situation in any way. My prediction is that sales will slow further in the October figures,” said Mikaeel Sandström, chairman of the retail branch of the Swedish Trade Association (Svensk handel Stil) to business newspaper Dagens Industri (DI) .

According to several analysts the clement climate has prompted several clothing retailers to launch early sales on coats and jackets.

The retail industry managed fairly well in the recession of 2008, but this time the going will get tougher for retailers, according to Sandström.

”Six months ago everything looked fairly bright and everyone was counting on a great autumn, which meant they bought rather large stocks. It is in the light of this that many have too much in their warehouses,” Sandström said.

Behind the decline is wavering private consumption but the warm weather is doing nothing to help, according to Sandström.

Several Swedish retailers are now announcing sales, and many have reported catastrophic figures for the last few months.

The Kapp-Ahl chain, for example, reported a 13 percent drop in sales for September and October compared with the previous year.

If trends continue, Sandström predicts that many outlets will be shuttered and some companies may face bankruptcy.

“Manufacturers bore the brunt of the last crisis, now it’s the retail sector that may get a taste of the poison,” he told DI.