Retailers enjoyed a third consecutive month of sales growth in the early build-up to Christmas, but are predicting flat sales in the new year, according to the CBI.

The business group’s latest Distributive Trades Survey shows that in the year to December 9, retailers maintained year-on-year sales growth at November’s levels, led by a strong performance from grocers and durable household goods.

Some 45 per cent of respondents said sales had risen in the last year, while 32 per cent reported a fall.

Sales for the time of year were reported to be poor by a balance of 16 per cent of retailers, and a net 13 per cent expect sales to remain below seasonal norms in January.

Andy Clarke, chairman of the CBI Distributive Trades Panel, and chief operating officer of Asda, said: “With a week left to go until Christmas, retailers may yet benefit from a flurry of last-minute sales and from shoppers bringing forward spending to beat the VAT rise.

“Grocers have continued to enjoy strong growth after some fierce price-cutting, while motor traders appear to be reaping the benefits of the scrappage scheme with sales growing at their fastest rate in seven years. Sectors relating to the housing sector are also seeing improvements.

“Although individual retailers may post healthy-looking Christmas numbers compared to the same time last year when we were in the grip of the recession, conditions across the whole of the sector are likely to remain challenging in 2010. The recent growth in retail sector sales is expected to fizzle out in the New Year."

The volume of orders placed upon suppliers rose again this month, albeit at a slightly slower rate than expected. Mirroring the movement in sales volumes, orders are also expected to be flat in the New Year.

In the wholesale sector, sales volumes were flat, beating expectations of a fall of 31 per cent. Very modest sales growth is anticipated in January. After 14 months of falling sales, industrial materials reported sales to be broadly unchanged on a year ago, the highest figure since August 2008.

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