The high street has recovered some of its sparkle after a strong bounceback in sales in recent days lifted optimism among Britain’s retailers.
Grocers, department stores and clothing shops all reported a solid rebound while wholesalers’ takings were broadly flat on a year ago, according to the latest CBI distributive trades survey spanning 27 November to 11 December, against the same period last year.
Barry Williams, who chairs the CBI survey panel and is a senior executive at supermarket giant Asda, said: “After a disappointing couple of months, sales volumes in December recovered their sparkle, beating retailers’ expectations.
“Customers have clearly held off spending through the autumn and we’re only now seeing them start to hit the stores. Retailers are now gearing up for the crucial pre-Christmas week and are optimistic for the New Year.”
Clothing sales in particular had been weak in October and November due to milder than usual weather, which dissuaded shoppers from buying new winter clothes.
The CBI survey is based on a relatively small sample of 106 firms though they are said to be responsible for a third of employment in retailing.
Official data last month showed that UK retail sales volumes grew by 1.8 per cent on the year in October. The Office for National Statistics was due to release its November retail sales data today.
Howard Archer, chief UK and European economist at forecasting consultancy IHS Global Insight, said: “The distributive trades survey indicates that retail sales gained appreciable momentum over the first half of December after muted sales in November and October.
“This suggests that lacklustre October and November sales largely reflected consumers taking a breather before Christmas after spending at a robust rate over the summer.” But he cautioned: “Further out, question marks remain as to how robust consumer spending will be in the early months of 2014 given that inflation is currently still running at double the rate of earnings growth.”
Figures this week revealed that the annual rate of consumer price inflation dipped to 2.1 per cent last month, the lowest level since November 2009. However, wage growth is currently running at just below 1 per cent.
In the CBI poll, 48 per cent of respondents reported that their sales were up on a year ago, while 14 per cent said they were down. The balance of plus 34 per cent was above expectations for a figure of 24 per cent.
In the wholesaling sector, 37 per cent of those quizzed reported that sales were up on a year ago, while 39 per cent said they were down, giving a “rounded” balance of minus 3 per cent.
In motor trading, there was a balance of zero per cent, which the CBI described as “significantly better than expectations”.
The survey has run for the past 30 years and the results form the UK component of a Europe-wide poll of retail trades. It failed to inspire shares in London retail stocks, with Marks & Spencer weaker after a downgrade from broker UBS.