They told Theresa Villiers that the situation is now critical.
Colin Neill, chief executive of Pubs of Ulster, said trade has been down by 30% to 40% in the past number of weeks since Belfast City Council changed its flag policy.
He added that one publican has reported a 54% drop in trade last week alone - while another has lost £60,000 since the protests began.
Mr Neill said the loss is "likely to cause irreparable damage" to that business.
"It is clear that the situation is now critical," explained Mr Neill.
"Fears of closures and job losses are fast becoming a reality, with some pubs not expected to make it to the end of January. It is clear that the industry cannot take much more.
"We hope that today's meeting demonstrates that urgent action needs to be taken to get our economy back on track and to save jobs."
Speaking after the meeting, the Secretary of State reiterated her message that the violence has to stop and said the way forward on the issue is through dialogue between political parties.
Ms Villiers continued: "We need to keep this in perspective - Northern Ireland is and continues to be a great place to visit, great for tourists and to invest, so we shouldn't let the protestors blind the world to all that's great about Northern Ireland.
"I'd like to see people coming out and doing their shopping, going to restaurants and showing solidarity with traders."
The Confederation of British Industry (CBI) has estimated £15m was lost to the economy over Christmas because some people avoided Belfast.
Last week Belfast City Council agreed a rates freeze to help traders affected by the flags trouble.
A motion to cut rates by 2% was put forward by the DUP but was defeated by Sinn Féin, the SDLP and the Alliance Party.
An urgent crisis meeting with city retailers has been called by the Belfast Chamber of Trade and Commerce to discuss ongoing disruption caused by flag protests.
Chamber President Joe Jordan said the meeting, which will be held on Wednesday, will discuss the downturn in trade and the "continuing hardship on the business community".
Glyn Roberts from the NI Independent Retail Trade Association, who was also at the talks on Monday, urged political leaders to "go the extra mile".
He said: "Given that 2013 is a vital year for Northern Ireland to attract more Foreign Direct Investment and Tourism, scenes of rioting being sent across the world by the many international media is doing real damage to the reputation of NI.
"This is a political problem and can only be resolved by politics and we would urge all of our political leaders to go the extra mile to resolve the flag issue and other grievances and above all to take this problem off the street."