Retail sales volumes rose for the second month running in November, and further growth is expected in December, according to the CBI.
The latest Distributive Trades Survey also showed business sentiment about the retail sector over the coming three months is now positive for the first time since August 2007.
40% of retailers said that their volume of sales in the year to November had risen, while 27% said they fell.
Stock levels fell back slightly from their position in October and a balance of 8% of firms now say that stocks are adequate to meet demand. Retail prices continued to grow but at a slightly slower rate.
Grocers and footwear and leather retailers reported stronger growth in November, while durable household goods and furniture and carpets retailers saw sales volumes rise for a second month, but with much slower growth in the latter.
Sales fell in the clothing and hardware, and china and DIY sectors.
Andy Clarke, chairman of the CBI Distributive Trades Panel, and chief operating officer at 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.”
He added: “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.
“Christmas aside, this December will also be busy because shoppers are trying to beat the VAT rise in January, and many retailers are starting to target that behaviour.”
Richard Lowe, head of retail and wholesale at Barclays, said: “Christmas is in full swing on the high street, and retailers have their sights set firmly on bringing customers in-store to spend early with many opting to advance their seasonal sales or for flash discounting. Sales as a result are looking more healthy and retailers will be encouraged by rises in clothing and household goods sales. There is a continued positivity in sales figures in early November echoing those of September and October.
“Carefully considering the new year’s forthcoming VAT increase, Christmas shoppers may be looking to purchase big-ticket items for themselves as well as the traditional items on their gift lists. Retailers have had all year to prepare for the return of VAT to at least 17.5%, with stocks now under much tighter control and their eyes fixed on margin management, the increase will come as less of a shock to the system than the sudden rate cut last year.”