Retail sales grew at their fastest pace in two years, and the high street is expecting growth to pick up further in the run-up to Christmas, the CBI said.

Its latest Distributive Trades Survey also showed that business sentiment about the retail sector over the coming three months is now positive for the first time since August 2007.

Responding to the survey, 40 per cent of retailers said that their volume of sales in the year to November had risen, while 27 per cent said they fell. Food retailers reported strong growth in November.

A balance of 19 per cent of retailers expect that, when compared with last December, sales volumes will improve next month in the critical pre-Christmas period.

In light of the growth in sales, the high street is generally said to be “feeling quite optimistic about the outlook for their general business situation”.

The volume of orders placed on suppliers rose for the first time since January 2008 and at the strongest rate since November 2007.

Only a net two per cent of firms said that sales were poor for the time of year, which was better than predicted while a net three per cent expect sales to be above the seasonal norm in December.

The three month moving average of sales volumes, which smoothes out monthly peaks and troughs, turned positive balance, up eight per cent and is expected to grow further in December.

In the wholesale sector, sales volumes rose modestly which was the first increase since May 2008, while orders on suppliers were cut only slightly. However, sales were below average for the time of year and 17 per cent of respondents expect the wholesaling business situation to worsen in the next three months.

Andy Clarke, chairman of the CBI Distributive Trades Panel, and chief operating officer of Asda, said: "It’s reassuring that the high street now has a second month of sales growth behind it, and it looks like December will be even better. A lot of retailers have suffered during 2009, and many are relieved that the year is ending on a more positive note.

"Despite the more upbeat mood and pre-Christmas sales growth, consumers are still worried about job losses and a weak economy. In 2010 the high street will find that recovery is fragile and slow.

Topics