Chain store retail sales dropped significantly in the latest week, as a result of high gasoline prices, ripple effects of Hurricane Katrina (search) and increased consumer concern about the future of the economy, a retail report said on Tuesday.

Sales dropped 2.1 percent in the week ended September 17, compared with 0.2 percent decline the previous week - the largest weekly dip since December 6, 2003 when the index fell 2.5 percent, the International Council of Shopping Centers (search) and UBS said in a joint report.

This tumble in the index follows last weeks fall in the U.S. consumers' confidence as the ABC News/Washington Post Consumer Comfort Index (search) fell to -20.

Warm weather also slowed demand for fall apparel, the ICSC said.

"Last week marked the 13th consecutive week with national temperatures trending above last year and above normal, according to the SDI/Weathertrends.

Compared with the same week a year ago, sales slowed dramatically to a 2.4 percent increase after a 3.5 percent rise the preceding week.

"Last week's sharp decline in consumer confidence, as measured by the ABC News/Washington Post Consumer Comfort Index, may have been a precursor of this week's spending drop," said Michael Niemira, ICSC's chief economist and director of research.

"As consumer confidence weakens, we have scaled back our monthly estimate for September's retail chain store sales to 3.0 percent on a year-over-year basis," Niemira added.

The ICSC-UBS Weekly Chain Store Sales Snapshot is compiled from a group of major discount, department and chain stores across the country that report their weekly results.