The report from ShopperTrak, which monitors customer traffic, also forecast total foot traffic to retail stores to fall 16.4 percent in the first quarter.

The report comes on the heels of the weakest holiday shopping season in decades, which led retailers including Wal-Mart Stores Inc , Macy's Inc and Gap Inc to warn of weaker quarterly results.

ShopperTrak said it expects continued economic pressure, rising unemployment, increasing foreclosures and uncertain credit markets to make consumers want to save money, rather than spend it, in the first quarter.

"Although consumers will continue redeeming gift cards and taking advantage of some post-holiday sales throughout January, slow first-quarter shopping levels will have the industry scrambling," said Bill Martin, co-founder of ShopperTrak.

Furthermore, a shift in the 2009 calendar moves the Easter holiday from March to mid-April, placing the holiday's annual sales boost into the second quarter, versus the first quarter last year.

"Looking ahead, the second quarter will most likely continue the trend of slumping sales and traffic levels, but the period could start showing some recovery as the middle-class tax break from the new administration instills confidence, and Easter and graduation spending take place," Martin said.

(Reporting by Martinne Geller, editing by Matthew Lewis)